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June 6, 2021

G7 Finance Ministers express strong support for global tax changes under BEPS 2.0

Executive summary

On 4-5 June 2021, the Finance Ministers and Central Bank Governors of the G7 countries1 met in London under the UK Presidency of the G7. A communiqué on key topics discussed at the meeting was issued at the meeting’s conclusion. On the G20/OECDInclusive Framework project on addressing the tax challenges of the digitalization of the economy (the BEPS2.0 project), the communiqué provides an expression of strong support for the ongoing work. It also includes information regarding the G7 Finance Ministers’ perspectives on some key parameters of the new rules being developed in the BEPS 2.0 project.

The G7 announcement is aimed at encouraging agreement among the 139 jurisdictions that are members of the Inclusive Framework in connection with the upcoming July meeting of the G204 Finance Ministers and Central Bank Governors.

Detailed discussion

G7 Finance Ministers and Central Bank Governors communiqué

The communiqué issued on 5 June 2021 at the close of the meeting of the G7 Finance Ministers and Central Bank Governors includes a statement on the global tax changes being developed under Pillar One (relating to new nexus and profit allocation rules) and Pillar Two (relating to new global minimum tax rules) of the BEPS 2.0 project:

We strongly support the efforts underway through the G20/OECD Inclusive Framework to address the tax challenges arising from globalisation and the digitalisation of the economy and to adopt a global minimum tax. We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises. We will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes, and other relevant similar measures, on all companies. We also commit to a global minimum tax of at least 15% on a country by country basis. We agree on the importance of progressing agreement in parallel on both Pillars and look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors.

Following the meeting, UK Chancellor Rishi Sunak made comments on global tax changes:

These seismic tax reforms are something the UK has been pushing for and a huge prize for the British taxpayer - creating a fairer tax system fit for the 21st century. This is a truly historic agreement and I’m proud the G7 has shown collective leadership at this crucial time in our global economic recovery.

In addition, US Treasury Secretary Janet Yellen made a statement focused on global minimum tax rules:

The G7 Finance Ministers have made a significant, unprecedented commitment today that provides tremendous momentum towards achieving a robust global minimum tax at a rate of at least 15%. That global minimum tax would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world. The global minimum tax would also help the global economy thrive, by leveling the playing field for businesses and encouraging countries to compete on positive bases, such as educating and training our work forces and investing in research and development and infrastructure.

Next steps in the BEPS 2.0 project

Current activity in the BEPS 2.0 project is focused on efforts to reach conceptual agreement in the Inclusive Framework on both Pillar One and Pillar Two in connection with the 9-10 July 2021 meeting of the G20 Finance Ministers and Central Bank Governors and to finalize that agreement in connection with October G20 meetings. The specific parameters reflected in the G7 communiqué with respect to profit allocation and coordination with Digital Services Taxes (DSTs) under Pillar One and with respect to the global minimum tax rate under Pillar Two are matters that are the subject of intensive negotiations in the Inclusive Framework. It remains to be seen what specifics will be included in any agreement that is reached in the Inclusive Framework.


The confirmation of G7 support for the BEPS 2.0 project is an important step in advancing the work on the proposals for fundamental changes to global tax rules. However, agreement on the proposals requires consensus among the 139 jurisdictions that are members of the Inclusive Framework. Efforts are focused now on trying to achieve that consensus in July when the G20 Finance Ministers next meet.

The proposals being developed in the BEPS 2.0 project could lead to significant changes in the overall international tax architecture under which multinational businesses operate. It is important for companies to follow these developments closely as they unfold in the coming weeks and beyond and to evaluate the potential impact of the proposals to their businesses.

Affected companies should also follow developments with respect to DST activity around the world.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Belastingadviseurs LLP, Rotterdam

Ernst & Young Belastingadviseurs LLP, Amsterdam

Ernst & Young Solutions LLP, Singapore

Ernst & Young LLP (United Kingdom), London

Ernst & Young LLP (United States), Detroit

Ernst & Young LLP (United States), Global Tax Desk Network, New York

Ernst & Young LLP (United States), Washington, DC



  1. G7 countries are Canada, France, Germany, Italy, Japan, the United Kingdom (UK) and the United States (US). 
  2. Organisation for Economic Co-operation and Development.
  3. Base Erosion and Profit Shifting.
  4. The G20 includes the European Union and 19 individual countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, and the US.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


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