The world’s largest economies have supported a global tax reform agreement that would impose a minimum tax (15%) on multinational companies. The German Finance Minister, Olaf Scholz, said this Saturday that the G20 has reached an agreement to support the taxation mechanism for multinationals agreed on July 1 by 130 countries and jurisdictions of the 139 that are part of the so-called inclusive framework of the OECD.
“The G20 countries have agreed here that they want to tackle a new international tax order,” Scholz said in statements to accredited media in Venice.
In a statement, the organizers of the meeting of the richest countries pointed out that it is “a historic agreement on a more stable and fair international tax architecture” and the G20 invited “all members of the OECD … who have not yet joined attached to the agreement to do so. ” It also calls on all countries participating in the negotiations to “quickly address outstanding issues and finalize design elements” before the next G20 meeting in October.
The agreement consists of setting a minimum corporate tax of 15% on profits and that companies have to tax their profits in the countries where they do business.
The finance ministers and governors of the G20 central banks have met for two days in Venice and have reached a political agreement to support this system, which will try to prevent multinationals from evading taxes or diverting their profits to tax havens.
Spain has supported in the G20 the historic agreement reached within the framework of the OECD to move towards a fairer and more sustainable tax system, in a meeting marked by economic recovery and work to strengthen multilateral economic cooperation in the face of new global challenges, as explained by the Ministry of Economic Affairs in a statement.
The Second Vice President and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, has valued the agreement reached after years of negotiations and very active work by Spain in the multilateral framework to reach an agreement.
“This is an unprecedented agreement to try to establish a more just and solid system at a global level, adapted to the 21st century. It is a historic agreement, but it is not the end of the road, it is the beginning of a process in which we must continue working at a global and European level ”, said Vice President Calviño after the meeting.
This political agreement opens a negotiation process to close technical elements and allow more countries to join before the meeting of heads of Government of the G-20 in October in Rome. The governments of Ireland, Hungary, Estonia and Cyprus distanced themselves from the agreement vis-à-vis the rest of the countries of the European Union.
In any case, the US Treasury Secretary, Janet Yellen, promoter of global taxation, has pointed out that although the G20 will try to get the small countries that resist to accept the agreement, “it is not essential that all countries are on board to move forward. “.
At the meeting, the ministers discussed the situation of the global economy and the response given to the crisis, underlining the role of support measures to avoid structural damage and preserve the productive fabric and financial stability.
The countries are committed to continuing to maintain an expansionary policy to support the recovery, avoiding any premature withdrawal of measures to support workers and businesses, while preserving financial stability and long-term fiscal sustainability.
G-20 members have also stressed the importance of continuing cooperative efforts in the health field, especially in developing countries.
Another of the key themes of the meeting has been climate action in the field of finance. The ministers have pledged to address, at the October summit, a roadmap to promote sustainable finance.
Spain supports the inclusion of environmental policy in the G20 global agenda and supports the mobilization of resources to promote the green transition and resilience to climate change, with mechanisms such as the price of carbon or environmental taxes, according to the Ministry in a statement.