World: Finance ministers of 20 of the world’s largest economies agreed on Saturday to set a minimum tax rate for corporate tax income of 15 percent, advancing a key priority of President Biden to stop multinational corporations from shifting their profits to low-tax countries.
The G20 gathering was held in the Italian city of Venice. This was the ministers’ first physical interaction since the outbreak. The two-day meet concluded on Saturday, adopting a joint communique on globalization of corporate tax.
As per a report released by NHK, the 15 percent minimum rate comes from the endorsement of 132 countries and territories, who want to “end global competition to offer lowest corporate taxes”. The G20 Finance Ministers also agreed to introduce new rules for taxing cross-border business.
However, countries such as Ireland that attract multinational firms with their lower corporate tax rates have not joined the agreement.
The final communique released by the G20 Finance Ministers encourages finalizing the details of the corporate tax rules by the next G20 gathering, which is scheduled for October. G20 nations will continue negotiations with the hope of reaching a final deal by October 2021.
The G20 mainly consists of members of the Organization for Economic Cooperation and Development (OECD) – Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the UK, the US, and the EU. Spain is a permanent guest.