Home Stock Market The G-20 is about to reach agreement on a minimum corporate tax...

The G-20 is about to reach agreement on a minimum corporate tax rate

Finance ministers from the world’s most developed economies said on Wednesday they hope to agree on reforming taxation practices of multinationals as well as minimum tax rates by the end. this year.

  • Prolonged multilateral negotiations on this question have been be strengthened this week when US Treasury Secretary Janet Yellen motioned support the idea of ​​a global minimum tax that will end the “race to a 30-year bottom” on corporate taxes.

  • The blueprint for an international deal on the issue was announced last October by the Organization for Economic Cooperation and Development, but the Trump administration later decided to withdraw from the lengthy multilateral negotiations.

  • According to the Financial Times, the US also launched this week its own proposal on how to tax the world’s largest multinationals, in similar directions as proposed by the OECD.

  • The current proposals will show that large multinationals, regardless of the nature of their businesses, are partially taxed on a country basis, relative to the revenue they derive from their businesses. corresponding market.

  • The US government, which has been planning to raise tax rates from 21% to 28% over the years, is aiming for a global minimum rate of 21%, although the OECD has suggested that it could be close to 15. %.

Read: Improved odds for the Global Corporate Tax Agreement as Yellen foreshadows her Agreement of Principles

Prospects: Corporate tax is another major area where the US rejoin a multilateral forum that helps kick off stalled negotiations. The hurdles remain on the way to reaching an agreement, but the prospect of a new trade and tax war in the post-pandemic global economy – at a estimated cost by OECD at 1% of global gross domestic product – can help with concentration.

Since there is a need for consensus on any agreement, countries with low tax rates such as Ireland are expected (where the 12.5% ​​corporate tax rate is considered a symbol of national sovereignty by all. political parties) will fight hard.



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