G20 Leaders Approve International Tax Reform

Sylvie Claire / October 31, 2021

Today, all G20 leaders approved a historic agreement on new international tax rules, including a global minimum tax, that will end the race to the bottom in corporate taxation, announced U.S. Treasury Secretary Janet Yellen in a statement.
  
The green light will be formally given in the final G20 communiqué on Sunday, according to several sources close to the negotiations in Rome. 
 
This agreement was concluded in early October under the auspices of the OECD by 136 countries, which represent more than 90% of global GDP. The reform should allow these countries to generate about 150 billion dollars of additional revenue per year through this minimum tax.
 
One of the components of the agreement is to reallocate a portion of the tax on the profits paid by multinationals to the countries where they carry out their activities. The tax will therefore no longer be due only where their headquarters are located.
 
The aim of the reform is to prevent multinationals and especially Gafa (an acronym for the giants Google, Amazon, Facebook and Apple), which have benefited greatly from the Covid-19 pandemic and the confinements, from paying derisory taxes in relation to their income.
 
The other part of the reform is the introduction of a minimum effective tax rate of 15% on the profits of multinationals. A state will be able to tax the foreign profits of one of its national companies that would have been taxed abroad at a lower rate than this minimum rate, in order to make up the difference.
 
The last-minute support of Ireland, Hungary and Estonia for the agreement in early October allowed the OECD to conclude negotiations just in time for the Rome summit.  
 
Their support will have been crucial, as France wants to take advantage of its rotating presidency of the european council from January 2022 to have the minimum tax adopted by a european directive, which requires unanimity.

 

      HTML Image as link                              

Related Posts

Elon Musk sells $1 billion worth of Tesla shares
Elon Musk sells $1 billion worth of Tesla shares
Sylvie Claire / December 3, 2021 Elon Musk has divested 934,000 shares of his Tesla car company for $1.01 billion, a...
Read More
Hong Kong: Former Apple Daily wins Golden Pen for press freedom
Hong Kong: Former Apple Daily wins Golden Pen for press freedom
Steph Deschamps / December 2, 2021     Imprisoned Hong Kong media mogul Jimmy Lai and the staff of his now-closed pr...
Read More
North Korean man who smuggled Squid Game into the country to be executed and high school students sentenced
North Korean man who smuggled Squid Game into the country to be executed and high school students sentenced
Sylvie Claire / December 1, 2021   North Korea is coming down hard on those who distribute and watch the hit Netflix ...
Read More