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Hacienda anticipates 100 Mexican companies will pay the new G7 global tax

Mexico City, Mexico — After the signing of the landmark global tax agreement Saturday, Mexico’s Hacienda says approximately 100 companies will pay the tax.

On Saturday in London, the world’s seven richest countries signed a landmark agreement to tackle corporate tax evasion and ensure giant companies pay their fair share.

British Finance Minister Rishi Sunak said that finance ministers from the Group of Seven Major Industrialized Countries (G7) signed the pact on the second and final day of meetings in London.

“I am pleased to announce that the G7 finance ministers reached a historic agreement today, after years of discussions, to reform the global tax system to accommodate the global digital age and, crucially, to ensure that it is fair, so the right companies pay the right tax in the right place,” Sunak said in a Twitter video.

The G7 ministers agreed in principle on a global minimum tax rate of 15 percent for multinational companies in each country in which they operate.

US Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement “provides tremendous momentum” to reach a global rate of 15 percent that “would guarantee fairness for the middle class and working people, both in the United States and around the world.”

The finance ministers meeting came ahead of an annual G7 leaders’ summit scheduled for June 11-13 in Carbis Bay, in the English county of Cornwall. The United Kingdom organizes both meetings because it holds the rotating presidency of the group.

International discussions on the tax issue gained momentum after US President Joe Biden endorsed the idea of a minimum global tax rate of 15 percent on corporate profits. The proposal also found support among other major economies such as France and Germany.

Nations have been grappling with the question of how to get companies to stop legally evading taxes by resorting to tax havens, typically small countries that attract companies with low or no taxes even though those companies do little real business there.

They have also been trying to solve the related problem of taxing internet companies that do business in countries where they have no physical presence and therefore pay little or no tax.

The G7’s backing could help build momentum toward an agreement in broader talks between more than 140 countries to be held in Paris, as well as during a meeting of the Group of 20 finance ministers in Venice in July.

In Mexico, the Ministry of Finance plans to include this tax in the 2022 economic package, announcing that up to 100 companies will be hit with the new 15 percent global tax.

“We are going to evaluate and see if we can have a definition beforehand of how this tax is going to work operationally (…) and if we have time, we would be including it in the 2022 economic package,” explained Gabriel Yorio, undersecretary of the Treasury.

The tax framework is expected to be applied to multinational companies such as Google, Apple and Amazon. The objective is to guarantee equity for the middle class, as well as to avoid the creation of tax havens.

The G20 countries, including Mexico, will discuss the G7 agreement in Venice next month.