When big government and big tech agree on something, it’s generally bad or the rest of us. In any case, the chances of this actually being adhered to by every country is substantially indistinguishable from zero. The cartel only works until one member breaks ranks, and there is very little incentive for countries like Bermuda to sign on.
There was, however, a big compromise to get this across the line. A minimum corporation tax rate of 15% is rather low. Although European finance ministers succeeded in including the phrase “at least 15%”, which offers a path to get that number higher.
How much bite this change actually has will depend on the fine print of ongoing negotiations. Tech firms say they welcomed the move. Facebook vice president Nick Clegg said they recognised it could mean the company “paying more tax, and in different places”.
And then there is the question of the rest of the world. This now goes from the G7 to the wider G20 group, including China, Russia and Brazil, and then beyond.
The German finance minister told me that the likes of Ireland, with its low corporation tax rate, now needed to “get on the change”.
The Irish finance minister told me he accepted that change was coming, but he would continue to argue for legitimate tax competition.
A process has begun, a precedent has been set. It may or may not end up being transformative, but this moment is historic.