Finance ministers from the G7 group of rich nations are meeting in London on Friday for two days of talks aimed at moving closer to a global deal to raise more tax from the likes of Google, Facebook and Amazon.
The gathering, chaired by British finance minister Rishi Sunak, is the first time the ministers have met face-to-face since the start of the coronavirus pandemic.
Rich nations have struggled for years to agree a way to raise more tax from large multinational companies, which often book profits in jurisdictions where they pay little or no tax.
The US. President Joe Biden's willingness to raise taxes on large businesses now creates more chance of an international consensus than under his predecessor Donald Trump, and a need to repair COVID-hit public finances makes it more pressing.
"I believe we can make significant progress in tackling some of the world's most pressing economic challenges," Sunak told reporters on Friday shortly before the meeting began.
Sunak stressed the importance of his fellow ministers from the United States, Japan, Germany, France, Italy and Canada being able to meet face-to-face in Lancaster House, an ornate 19th-century mansion almost next door to Buckingham Palace.
"You need to be round a table, openly, candidly talking through things," Sunak told Reuters in an interview this week. .
Due to COVID restrictions, ministerial delegations have been cut down and there are few travelling journalists. Seating plans have been redesigned with the help of public health officials, and Sunak greeted leaders by bumping elbows, not shaking hands.
But the bigger challenge remains reaching an agreement on tax reform which could then be presented to a broader group of countries, the G20, at a summit in Venice in July.
In a joint letter on Friday, finance ministers from Germany, France and Italy wrote that they would "commit to defining a common position on a new international tax system at the G7 Finance Ministers meeting in London".
"We are confident it will create the momentum needed to reach a global agreement," they added. Spain signed the letter too.
However, Japanese finance minister Taro Aso said on Monday that he did not expect agreement this week on a specific minimum tax rate.
The US Treasury expects a fuller agreement to come when Biden and other heads of government meet at a secluded beach resort in southwest England on June 11-13.
MINIMUM 15pc RATE
The United States has proposed a minimum global corporate tax rate of at least 15 per cent. If a company paid tax somewhere with a lower rate, it would probably have to pay top-up taxes.
Biden had been planning to raise the US domestic corporate tax rate to as high as 28 per cent. But on Thursday he proposed a tax floor of 15 per cent in a bid to gain support from Republicans for new spending measures.
