- The finance ministers of the major industrial and commercial countries decided to introduce a global tax reform with the imposition of minimum taxes on large companies.
- German Vice-Chancellor Olaf Schulz (Social Democratic Party) spoke of a “great historical moment”.
“The G20 countries have now agreed that they want to agree on a new system of international taxation among themselves,” Schultz said. At the end of the ministerial discussion, applause.
The reform providing for a 15 percent minimum tax and a new distribution of tax rights between states is expected to take effect in 2023. The last questions should be clarified by October of this year, when the heads of state of the G20 countries agree.
It’s about fair taxation
At the business level, 131 countries around the world have already approved the plans. The minimum tax of 15 percent is intended to prevent companies from moving their headquarters to low-tax countries and to prevent states from lowering their corporate taxes in competition with one another.
In addition, international corporations not only have to pay taxes in their home countries in the future but also have to pay taxes in their home countries. This affects, among other things, large digital companies, which often pay little tax yet overall. At the same time, states will get more money to fund their community – and large, highly profitable businesses will be taxed more fairly.
Some asked for a higher minimum rate
The German industrial association BDI has warned that the minimum tax rate should be based on the 15 percent applied by the USA. Several countries, including France and Germany, have previously indicated that they actually want a higher minimum rate.
The BDI also warned that G20 nations must now speak out against additional national and European digital taxes that could lead to competitive disadvantages and trade conflicts.
Legend:
German Finance Minister Olaf Schulz describes the decision as a great historical moment.
Keystone
US Treasury Secretary Janet Yellen has also called for an end to European digital taxes. In Venice, she said she hopes that the international agreement on the redistribution of tax rights will make it possible to get rid of existing digital taxes. The United States sees these taxes as discriminatory against American corporations.
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