G20 leaders sign global agreement on corporate tax of at least 15%

Leaders of the world’s 20 largest economies have signed an agreement with the Organization for Economic Co-operation and Development (OECD) for a corporate tax rate of at least 15% globally, the United States said .

Ireland had been one of the resistant to the deal to reform the taxation of multinationals, but finally agreed to change its long-standing flagship corporate tax rate of 12.5% ​​earlier this month.

US Treasury Secretary Janet Yellen announced that all leaders of countries representing 80 percent of the global economy supported reform at the Rome summit.

“Today, every G20 head of state approved a landmark agreement on new international tax rules, including a global minimum tax that will end the damaging race to the bottom in corporate taxation,” said Yellen . “This is a critical time for the United States and the world economy.”

She praised US President Joe Biden for the “achievement”.

However, the president has yet to push the deal through the US Congress, where he might meet resistance.

Mr Biden said the reform had received “clear” support from all 20 nations, representing “both their allies and their competitors.”

“It’s more than just a tax deal – it’s diplomacy that is reshaping our global economy and serving our people,” he said.

The European Union is expected to push ahead with its plans, as the committee said it will publish plans to transpose tax reform into EU law by the end of 2021.

The reform aims to bring about a fairer taxation of digital giants who have minimized their tax obligations by using the most advantageous jurisdictions, angering some of the largest economies in the world who feel that their national treasures are lacking in spite of huge income. through sales to their citizens.

“Reduce inequalities”

According to government figures, the proposed adjustments to the jurisdictions to which the tax is payable are expected to reduce Irish revenues by up to € 2 billion per year.

Opening the summit, Italian Prime Minister Mario Draghi hailed efforts to “reduce inequalities” and “promote sustainability” and said the success of Covid-19 vaccines and efforts to spur economic recovery showed that there are had reason to be optimistic.

“Together we are building a new business model and the world will be a better place for it,” said the former central banker. He described the tax deal as “a landmark agreement for a fairer and more efficient international tax system.”

With remote participation from Chinese and Russian leaders, the 20 countries are negotiating how to accelerate a more equitable global distribution of vaccines and preparing pledges to tackle climate change with the aim of building momentum ahead of the UN climate conference Cop26 in Glasgow.

Luisa D. Fuller