Economic leaders in the group of 20 major global economies on Saturday approved an agreement to update the rules for imposing taxes on international companies.
The G20 summit in Venice approved a fee restructuring agreement discussed by 131 countries at the Organization for Economic Cooperation and Development (OECD).
European Economic Commissioner Paulo Gentiloni has said that the EU’s priority from now on is a 15% minimum global tax on multinational corporations. “We are going to evaluate everything, but today we have decided that priority is number 1,” he told the media after the meeting.
This observation comes in response to US pressure on the European Union to abandon plans to impose different taxes on the community. The approved course of action is to end where tax sites and tax companies generate revenue.
“After several years of discussions and progress on last year’s progress, we have reached a historic agreement on a more sustainable and equitable international tax architecture,” finance officials said in a statement.
The group members also said at a meeting in October that the terms for the new tax architecture should be finalized. Until then, no further changes should be made, but governments such as the United States, France, and Germany have already resisted rates above 15 percent.
At a meeting on Saturday, France suggested that countries pay 25% tax to multinational companies. Ireland and Hungary, who are participating in the OECD working group that called for the increase, have yet to come out in favor. The islands of St. Vincent and the Grenadines are the 132nd country to sign the agreement, according to the OECD website. U.S. Treasury Secretary Janet Yellen said the G20 would try to understand the reluctance of some countries by October, but ressed that “it is not necessary for all countries to exist.”
The purpose of the reform is to distribute the right to tax equally to the profits of multinational corporations. For example, there is a company like oil giant BP in 85 countries. The OECD estimates that an effective rate of at least 15% will generate additional revenue of $ 150 billion per year.
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