G20 officials approve multinational tax agreement | world and science

A demonstrator holds a sign during a protest in Venice against the G20 meetingFrance Press agency

by AFP

Posted on 10/07/2021 3:39 PM

The authorities of the Group of Twenty, meeting in Venice, Saturday, the tenth, approved the “revolutionary” agreement on taxation of multinational companies, which promises a final change of international taxation. Introducing a global corporate tax of “at least 15%” to end tax havens and the tax havens that generate their revenue: This financial big bang, whose rules must be adjusted by October, takes its implementation one step further in 2023.

US Treasury Secretary Janet Yellen celebrated the agreement, urging the world to “move quickly to end” the reform, while European Economic Commissioner Paolo Gentiloni spoke of a “victory for fiscal justice.”

French Economy Minister Bruno Le Maire has received “no possible turning back”, now calling for “the effective implementation of international tax reform by 2023”.

Several G20 members, including France, the United States and Germany, are campaigning for a rate of more than 15%, but that is not expected to change until the next meeting of the 19 richest countries in the world and the European Union in October.

But some members of the Organization for Economic Co-operation and Development (OECD) working group who reached a tentative agreement on July 1 have not yet taken a position, such as Ireland and Hungary.

Ireland has implemented a 12.5% ​​tax since 2003, which is very low compared to other European countries, which has allowed it to host the European headquarters of many tech giants, such as Apple and Google.

Tax reform, which has been negotiated for years, focuses on two pillars: setting a global minimum tax rate and creating a system that aims to distribute taxes to large corporations more equitably, according to the profits made in each country, regardless of where they are headquartered.

Pascal Saint-Amans, Director of the Department of Tax Policy and Tax Administration, Pascal Saint-Amans, explained that “the 100 most profitable companies in the world, which alone generate half of the world’s profits”, among which Gafa (Google, Amazon, Facebook and Apple) is in sight. Center at the OECD.

The minimum global tax will affect less than 10,000 large companies, whose annual turnover exceeds 750 million euros. According to the Organization for Economic Co-operation and Development (OECD), a minimum effective rate of 15% would generate an additional $150 billion in revenue annually.

Under the Italian presidency, ministers from the 19 richest countries in the world and the European Union met for the first time since the outbreak of the coronavirus pandemic. The last time was in February 2020, in Riyadh, a few days before the first outbreaks were detected in Europe.

If US Treasury Secretary Janet Yellen, European Central Bank President Christine Lagarde, or International Monetary Fund Managing Director Kristalina Georgieva made the trip, China and India would opt for the hypothetical participation.

While the Arsenal area – where the meeting is being held – was sealed off with police checkpoints, several hundred anti-G20 protesters gathered on Saturday afternoon in central Venice, causing some unrest with the police.

The G20 also supported the International Monetary Fund’s initiative to increase aid to the most vulnerable countries, through a new issuance of Special Drawing Rights (SDR), in the amount of 650 billion US dollars.

In April 2020, the G20 decided to postpone interest payments on the debt of the poorest countries. At the last meeting, in April 2021, the measure was extended until the end of the year.