The Finance Ministers of the G7 met this weekend and reached the landmark decision to create a global minimum corporate tax rate of at least 15%.

                By                    Georgina Tzanetos

In a press release provided after the meeting, the Ministers claimed that they commit to “a global minimum tax of at least 15% on a country by country basis.” They also stated commitments to an equitable solution on 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.

See: Interest Rates May Need to Go Up – Yellen’s Comments And How They Affect YouFind: How Should Your Budget Change With Increasing Inflation?

More From Your Money: Choose a high-interest saving, checking, CD, or investing account from our list of top banks to start saving today.

Politicians all over the world have been trying for decades to wrangle in off-shore tax havens, but without international cooperation, attempts have been futile. That is until Saturday’s meeting, where the finance ministers of the United States, UK, Canada, Italy, France, Germany and Japan decided to finally push for the implementation of a global minimum.

The two-pillar strategy would apply to large global companies with a profit margin of 10% or more. These companies would now be required to pay taxes on 20% of profits they earn above the 10% threshold in countries where they generate the revenue.. The second pillar is the 15% tax rate, which would create a flat tax rate for companies generating profits within certain countries. Reuters reports that the global minimum tax rate would apply to overseas profits. Governments would still set whatever local corporate tax rate they wanted, but if companies pay lower rates in a particular country, their home governments could increase their taxes to the minimum rate, eliminating the advantage of shifting profits they add.

U.S. Treasury Secretary Janet Yellen said after the meeting, “We think it’s a fair way to collect revenues…I honestly don’t think there’s going to be a significant impact on corporate investment.” Yellen’s comments highlight that she does not believe companies will be significantly financially impacted by the increased taxes to a degree where important investing would cease. She also added that the $1.5 trillion tax cuts businesses enjoyed in 2017 did little to lift American investment, the NYT reports.

See: Why You Shouldn’t Worry About All Those Price Hikes in the NewsFind: OPEC Increases Production as Oil Prices Begin to Impact Summer Travel Plans

  • Jaw-Dropping Stats About the State of Retirement in America
  • Big Personal Goals That You Should Put Your Money Toward
  • 20 Home Renovations That Will Hurt Your Home’s Value
  • 27 Things You Should Never Do With Your Money