The leaders of the largest economies in the world endorsed Saturday a global minimum corporate tax, which is a key component of new international tax rules. This will help to reduce the fiscal paradise edge amid the skyrocketing profits for some multinational companies.

Janet L. Yellen, U.S. Treasury Secretary, praised the Group of 20 summit’s decision in Rome as a benefit to American workers and businesses.

In July, G-20 finance ministers had already reached an agreement on a minimum 15% tax. It was awaiting formal approval at Saturday’s summit in Rome of the economic powerhouses around the world.

In a statement, Yellen said that the agreement on new international tax rules with a minimum global income tax “will end the harmful race to the bottom in corporate taxation.”

Although the deal fell short of President Joe Biden’s initial call for a minimum 21% tax, it was still a good result. Biden still expressed his satisfaction via Twitter.

The president tweeted that “Here at G20, leaders representing over 80% of the world’s GDP — allies as well as competitors — made it clear they support a strong global tax minimum.” This is not just a tax deal. It’s diplomacy that transforms our global economy and delivers for our people.

This agreement is designed to discourage multinationals storing profits in countries that pay low or no taxes. Multinationals are able to make huge profits with intellectual property and trademarks. These multinationals can then transfer earnings to a subsidiary located in a tax haven.

Midway through the summit, Angela Merkel, German Chancellor, stated that there were good things to be reported. The world community has reached an agreement on a minimum taxation for companies. This is a clear sign of justice in these times of digitalization.

Mathias Cormann (secretary-general of Paris’ Organization for Economic Cooperation and Development) stated that the Rome deal “will make our international fiscal arrangements fairer and more effective in a digitalized and globalized world.”

Cormann argued that the minimum rate “completely eliminates incentives for businesses around the globe to restructure and avoid tax.”

 

The summit heard pleas for more vaccinations in the poorer countries, among other important issues that are crucial to fairness around the world.

ROME (AP), — The leaders of the world’s largest economies endorsed a global corporate minimum tax, which is a key component of new international tax rules. This will help to reduce the fiscal paradise edge that some multinational companies are enjoying amid the skyrocketing profits.

Janet L. Yellen, U.S. Treasury Secretary, praised the Group of 20 summit’s decision in Rome as a benefit to American workers and businesses.

In July, G-20 finance ministers had already reached an agreement on a minimum 15% tax. It was awaiting formal approval at Saturday’s summit in Rome of the economic powerhouses around the world.

In a statement, Yellen said that the agreement on new international tax rules with a minimum global income tax “will end the harmful race to the bottom in corporate taxation.”

Although the deal fell short of President Joe Biden’s initial call for a minimum 21% tax, it was still a good result. Biden still expressed his satisfaction via Twitter.

The president tweeted that “Here at G20, leaders representing over 80% of the world’s GDP — allies as well as competitors — made it clear they support a strong global tax minimum.” This is not just a tax deal. It’s diplomacy that transforms our global economy and delivers for our people.

This agreement is designed to discourage multinationals storing profits in countries that pay low or no taxes. Multinationals are able to make huge profits with intellectual property and trademarks. These multinationals can then transfer earnings to a subsidiary located in a tax haven.

Midway through the summit, Angela Merkel, German Chancellor, stated that there were good things to be reported. The world community has reached an agreement on a minimum taxation for companies. This is a clear sign of justice in these times of digitalization.

Mathias Cormann (secretary-general of Paris’ Organization for Economic Cooperation and Development) stated that the Rome deal “will make our international fiscal arrangements fairer and more effective in a digitalized and globalized world.”

Cormann argued that the minimum rate “completely eliminates incentives for businesses around the globe to restructure and avoid tax.”

The summit heard pleas for more vaccinations in the poorer countries, among other important issues that are crucial to fairness around the world.

Mario Draghi, the Italian Premier, made a strong call to accelerate vaccine delivery to countries in need.

Draghi, who hosted the summit, stated Saturday that only 3 percent of the population in the poorest countries in the world have been vaccinated while 70% of those in the richest countries have received at least one shot.

Draghi, an economist who was once the chief of the European Central Bank, stated that these differences were morally unacceptable and would undermine the global recovery.

Emmanuel Macron, the French President, has promised to use the summit as an opportunity to push fellow European Union leaders for more generous vaccine donations to low-income countries.

However, civil society advocates who met with G-20 officials stated that suspension of vaccine patents is crucial for increasing access to poor countries.

Canada stated that it is both sharing vaccines and donating money to South Africa’s production. South Africa is a G-20 member. Chrystia Freeland (Deputy Prime Minister) stated that Canada was increasing its commitment for international vaccine sharing through COVAX by donating 200 millions doses.

Summit also faces two-track global recovery, in which rich countries bounce back faster.

Rich countries have used stimulus spending and vaccines to stimulate economic activity. This leaves the possibility that countries in developing countries, which account for a large portion of global growth, will be left behind by low vaccination rates and financial difficulties.

Macron told reporters that he expected the G-20 to confirm $100 billion more to support Africa’s economy.

It is hopeful that the G-20 will make crucial commitments to countries responsible for around 80% of global climate change. This comes just before the end of the Rome summit.

The G-20 leaders will be based in Glasgow.

The Rome summit was attended remotely by Vladimir Putin, Russia, and Xi Jinping, China. Their efforts to reduce carbon emissions are crucial to combating climate change.

Midway through the summit, it was the corporate rate rule that won.

Officials at the White House claim that the new tax rate will generate at least $60 billion per year in new revenue in the U.S., which could partially help pay for the nearly $3 trillion infrastructure and social services package that Biden seeks. Because so many multinational corporations are headquartered in the United States, U.S. adoption has become a key issue.

Civil 20, which is composed of 560 organizations representing more than 100 countries and makes recommendations to the G-20 was less enthusiastic. Riccardo Moro, Civil 20 official, said that the 15% rate was “a little less than those (rates), we’d consider fiscal paradisas.”