Again and again corporate profits are shifted to tax havens. The leading economic powers have now also spoken out in favor of a global reform of corporate taxation.
According to participants, the heads of state and government of the 20 leading economic powers spoke out in favor of the recently negotiated global corporate tax reform at a summit meeting.
The “historic agreement” on a minimum taxation for large companies will end the harmful global race for the lowest tax rates for companies, said US Treasury Secretary Janet Yellen on Saturday. Chancellor Angela Merkel (CDU) called the agreement in the evening “a clear signal of justice in the age of digitization”.
Draghi: “Historic Agreement”
The host of the G20 summit in Rome, the Italian Prime Minister Mario Draghi, spoke of an event steeped in history. “We have reached an historic agreement for a fairer and more efficient international tax system,” said Draghi. US President Joe Biden also praised the agreement.
As part of the Organization for Economic Cooperation and Development (OECD), 136 countries had already approved the planned reform at ministerial level. The countries together account for a good 90 percent of global economic output. Well-known tax havens such as the Cayman Islands and countries such as Ireland, which resisted until the end due to their low tax rates, are also included.
The main aim of the reform is to prevent corporate profits from shifting to tax havens. Large, internationally active companies should therefore pay at least 15 percent tax regardless of their headquarters by 2023 at the latest. If a company with its subsidiary pays less taxes abroad, the home country can collect the difference. In addition, profitable, globally operating digital companies such as Amazon and Google should no longer be taxed only in their mother country, but also where they do good business.
In the German Ministry of Finance it was expected that the tax reform could generate additional income of around 7.8 billion euros in an initial phase. Among other things, this is important for the ongoing coalition negotiations by Chancellor candidate Olaf Scholz for a traffic light coalition with the Greens and the FDP. Since there should be no tax increases under pressure from the FDP, the future coalition will have to rely on new sources of finance for costly plans. Worldwide, the OECD recently reckoned with the minimum tax with 150 billion dollars (about 130 billion euros) in tax revenue.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
