The proposal aims to discourage multinationals from moving their profits to tax havens.

Activists stage a protest on a mock tropical island beach representing a tax haven outside a meeting of European Union finance ministers in Brussels, Belgium, December 5, 2017.
Activists stage a protest on a mock tropical island beach representing a tax haven outside a meeting of European Union finance ministers in Brussels, Belgium, December 5, 2017. (AFP Archive)

Nearly 140 countries will haggle over key details of a global corporate tax plan this week, with some concerned about giving up too much and others eager to ensure tech giants pay their fair share.

The Group of Seven (G7) wealthy democracies approved a proposal to impose a minimum corporate tax rate of at least 15 percent earlier this month, hoping to stop a "race to the bottom" as nations compete to offer the lowest rates.

It is one of two pillars of reforms that would also allow countries to tax a share of profits of the 100 most profitable companies in the world - such as Google, Facebook and Apple - regardless of where they are based.

READ MORE: G7 nations set minimum global corporate tax at 15 percent

The deal now goes to the Organisation of Economic Co-operation and Development (OECD), which is overseeing two days of talks starting Wednesday to find a consensus among 139 countries.

The proposal will then be taken up by the G20 club of wealthy and emerging countries at a meeting of finance ministers in Italy on July 9 and 10.

"I don't think we have ever been so close to an agreement," said Pascal Saint-Amans, director of the OECD tax policy centre.

US President Joe Biden has galvanised the issue by backing the global minimum corporate tax, and Europeans want a deal, he said.

Negotiations have gained new urgency as governments seek new sources of revenue after spending huge sums on stimulus measures to prevent their economies from collapsing during the coronavirus pandemic.

Tax heavens not happy

While the G7 - the United States, Canada, Japan, France, Britain, Italy and Germany - approved the plan, it still faces hurdles as the negotiations expand to other nations.

European Union members Ireland and Hungary are not thrilled about it, as their corporate taxes are less than 15 percent.

Ireland has become the EU home to tech giants Facebook, Google and Apple thanks to its 12.5-percent rate.

But another EU country that has benefited from a low rate, Poland, voiced support for the proposal last week.

Two sources involved in the negotiations told AFP that China, which has a reduced rate for companies in key sectors, would not want a rate that exceeds 15 percent.

Source: AFP