G20 members have reached agreement on a deal that would set a minimum tax rate for large corporations, German Finance Minister Olaf Scholz said on Saturday.
The comments came amid talks between finance ministers from the world’s largest economies in Venice, Italy.
A final joint statement is expected to be released later Saturday.
Although progress has been made, a final agreement on the minimum tax rate is not expected until the G20 leaders’ summit in October.
What did the ministers say?
Ministers signed a global minimum tax for large corporations and tax multinationals, Scholz told reporters at the G20 finance ministers meeting in Venice.
“Today we see that all the countries that meet here will support this international process to find a way to achieve minimum taxation,” said Scholz.
The German Finance Minister added that now that the G20 members are on board, the focus will be on how to implement the measures so that they can enter into force by the current 2023 deadline.
“It’s a very, very short time,” Scholz said, but noted that major progress has been made.
DW’s Bernd Riegert noted that the ruling meant “the end of tax havens could be near”.
US Treasury Secretary Janet Yellen has said that while Washington will seek to address the concerns of some reluctant countries, “it is not essential that every country is on board.”
“This agreement contains a kind of enforcement mechanism that can be used to ensure that recalcitrant countries are not in a position to undermine – use tax havens that undermine the functioning of this global agreement,” he said. she declared.
Some EU member states, including Hungary and Ireland, have held back. Ireland is home to the European headquarters of some tech giants, including Google and Facebook, due to its low tax rates.
What is the overall plan for tax reform?
The United States had proposed a minimum corporate tax of 15% to prevent tax havens from competing to attract big business.
More than 130 countries have already supported the plan, negotiated by the Paris-based Organization for Economic Co-operation and Development (OECD).
The minimum rate of 15% would affect less than 10,000 multinational companies, those with annual turnover above 750 million euros ($ 890 million).
The second part of the reform would give countries the right to tax multinationals for profits made in the country. This measure would particularly impact tech giants like Google, Facebook, Amazon and Apple.
G20 members – made up of the world’s largest economies – stand to benefit the most from the planned tax reform.
It would bring around $ 150 billion (€ 127 billion) in additional tax revenue globally.
fb, rs / dj (Reuters, dpa, AFP)