The Group of Seven (G7) has backed the United States’ proposal calling for corporations around the world to pay at least 15% tax on their earnings. The reform affects the largest companies with profit margins of at least 10%. U.K. Finance Minister Rishi Sunak says it will help ensure that the right companies are paying the right tax in the right places. The decision caused U.S. stock futures to be mixed Monday morning. While taxes will be rising for corporations, people around the world are paying more too. Economists say global inflation is raising the price of virtually everything. In fact, in May, global food prices rose for the 12th month in a row – up nearly 40% year-over-year.
G-7 nations reach historic deal on global tax reform
The finance ministers of the most advanced economies, known as the Group of Seven, have backed a U.S. proposal that calls for corporations around the world to pay at least a 15% tax on earnings.
“G-7 finance ministers today, after years of discussions, have reached a historic agreement to reform the global tax system, to make it fit for the global digital age — and crucially to make sure that it’s fair so that the right companies pay the right tax in the right places,” U.K. Finance Minister Rishi Sunak announced in a video statement on Saturday.
If finalized, it would represent a significant development in global taxation. Members of the G-7, which include Canada, France, Germany, Italy, Japan, the U.K. and the U.S., will convene for a summit in Cornwall, U.K., next week.
An agreement among this group would provide needed momentum for upcoming talks planned with 135 countries in Paris. Finance ministers from the Group of 20 are also expected to meet in Venice in July.
“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,” according to a statement from the G-7 finance ministers.
Keep reading, here.
Fox Business/Jonathan Garber
Stock futures mixed as G7 nations reach global minimum corporate tax deal
U.S. stock futures were mixed Monday morning as traders disgusted the weekend agreement by G7 countries to set a global minimum corporate tax rate.
Dow Jones Industrial Average futures rose 36 points, or 0.1% while S&P 500 futures ticked up 0.01% and Nasdaq 100 futures were down 0.03%.
Finance ministers from the world’s most advanced economies committed to a global minimum corporate tax rate of 15% in an effort to prevent multinationals from relocating to tax havens. The agreement is non-binding.
In stocks, mega-cap technology names, which would be among the most impacted by the G7 agreement, including Apple Inc., Google Inc. and Facebook Inc. were in focus.
Meanwhile, traders continued to keep a close eye on shares of AMC Entertainment Holdings Inc. after short-sellers last week suffered about $2 billion in losses, according to financial analytics firm S3 Partners.
Tesla Inc. has scrapped plans for its high-end Model S Plaid+ sedan, according to a tweet from CEO Elon Musk. The company had been accepting refundable deposits on the vehicle, which was expected to have a range of 520 miles, compared with 390 miles for the Model S Plaid sedan.
Continue reading, here.
CNN Business/Chauncey Alcorn
Global food prices surge to their highest level in a decade
Global food prices rose for the 12th month in a row in May, up nearly 40% year over year, according to the United Nations’ food price index. Last month was also the sharpest monthly rise in average food prices in over a decade, spiking 4.8% from April to May.
Abdolreza Abbassian, senior economist for the UN Food and Agriculture Organization, says surprising demand for corn in China, an ongoing drought in Brazil and increased global use of vegetable oils, sugar and cereals has caused prices to surge rapidly around the globe.
“The demand, really I would say, is almost surprising everyone,” Abbassian told CNN Business. “This demand requires a strong supply response.”
Global inflation is raising prices on virtually everything, from food to steel to lumber and energy. In countries that belong to the Organization for Economic Cooperation and Development, prices surged in April to the highest rate since 2008.
Read the full story, here.