The G7 corporate tax plan is a chance to make the world a fairer place to do business | Arun Advani and Lucie Gadenne

Giant companies that pay little tax will compete on a more level playing field. Now we have to make the new rules work

A decade ago, a series of scandals rumbled through the corporate tax world, as we all learned how big companies often paid little tax. Amazon, Google and Starbucks were hauled before parliament to explain why their tax bills were so low. What was truly shocking wasn't the way they had broken the law, but the fact that they hadn't. The global corporate tax system was incredibly leaky. International agreements to ensure no double taxation were, and are, actually leading to double non-taxation of company profits.

Large companies routinely avoid paying their fair share of taxes by shifting" their profits to low-tax countries. This has led to a dramatic decline in the amount of tax governments collect from corporations. What's more, profit shifting gives multinational companies a huge advantage over smaller ones: instead of competing to offer a better service, they just can keep costs low by paying less in tax. How is your local coffee shop, paying the 19% corporate tax rate on its profit, supposed to compete with the likes of Starbucks, which paid minimal tax despite large sales?