G20 ratifies the 15 % tax on multinationals

G20 leaders ratified at the Rome summit their support for the minimum tax on multinationals of 15 % after years of talks, the White House said in a statement.

“All leaders supported a global minimum tax. The president of the United States, Joe Biden, highlighted the importance of this historic agreement during his intervention,” reads part of the statement from the US government.

Biden further stated that “the international community, thanks to the agreement on this global minimum tax, will support people by ensuring that companies will contribute by paying their fair share.” “This is more than just a tax deal, it is diplomacy that is reshaping our global economy and delivering benefits to our people.”

The Secretary of the Treasury, Janet Yellen, stressed that this agreement, proposed by Washington, is reached at a critical moment” for the world economy and that “it will put an end to the damaging race to reduce corporate tax.

She added in a message posted on Twitter that the agreement will benefit US workers even if the country’s large multinationals have to pay more taxes.

The pact had already gained enormous support in July and October when the G20 economy and finance ministers reached a framework agreement, as happened later in the framework of the Organization for Economic Cooperation and Development (OECD).

The agreement has two fundamental objectives: to prevent large multinationals from diverting their profits to countries considered practically as tax havens and to address the digital nature of international trade by taxing companies in the places where they operate, rather than in those countries where they declare its benefits.

The United States and five European governments contributed just over a week ago to cement this ratification by allowing European countries to maintain their taxes on digital services to giants like Facebook and Amazon.

K. Tovar

Source: Economista