German Finance Minister Olaf Schulz said on Saturday that the G20 had reached an agreement to support the tax mechanism for multinational companies that was agreed on July 1 by 130 countries and 139 jurisdictions that form part of the so-called comprehensive framework of the OECD. economic and development. The minimum corporate rate is 15%.
“The G20 countries have agreed here that they want to tackle a new international tax regime,” Schulz said in statements to the media accredited in Venice. The finance ministers and central bankers of the Group of Twenty met for two days in Venice and reached a political agreement to support a system that will try to prevent multinational companies from evading taxes or shifting their profits to tax havens.
The finance chiefs of the Group of 20 economies approved on Saturday a landmark measure to prevent multinational companies from shifting their profits to tax havens. They also recognized the need to ensure equitable access to vaccines in the poorest countries. But the draft statement to be approved in Venice, Italy, does not contain specific new proposals on how to do so.
The tax deal was to be the main political initiative of their talks. This is the largest political initiative in the negotiations of eight years of discussions on the tax issue. The goal is for national leaders to give him the last blessing at the G-20 summit in October in Rome.
The agreement provides for a minimum worldwide corporate tax of at least 15% to discourage multinational corporations from seeking the lowest tax rate. It will also change the way multinational companies like Amazon and Google establish themselves in the countries where they sell their products. German Finance Minister Olaf Scholz stressed that “this agreement contains a kind of implementation mechanism to ensure that countries that resist are not able to undermine their operation.”
The G20 members represent more than 80% of the world’s GDP, 75% of global trade, and 60% of the planet’s population, including the United States, Japan, the United Kingdom, France, Germany, and India. In addition to the EU countries that remain on the sidelines – Ireland, Estonia and Hungary – and other countries that have not signed are Kenya, Nigeria, Sri Lanka, Barbados, Saint Vincent and the Grenadines.
Another sticking point is the struggle in the US Congress over raising taxes on corporations and Americans with more income and wealth, which could cause problems, as does the European Union’s plan to introduce a digital tax on tech companies. The US warns that the EU’s digital rate does not comply with the global agreement, even if the tax is largely directed at European companies.