Chancellor hails global cooperation as landmark tax reforms aimed for 2023

The landmark plan comes from the deal agreed in principle by the G7 at talks chaired by the Chancellor in June and will mean multinationals pay their fair share of tax in the countries they do business (Pillar One), along with a minimum 15 per cent corporation tax rate in each country they operate in (Pillar Two).

“We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business,” Mr Sunak said.

The deal means that firms with at least a 10 per cent profit margin will see 25 per cent of any profit above the 10 per cent profit margin reallocated and then subjected to tax in the countries they operate. Previously countries had only agreed to reallocating “between 20 per cent and 30 per cent”.

The principles of the agreement were agreed at OECD level in July and the UK will continue discussions with its global partners over the coming months as it looks towards beginning the implementation process.