Leaders at the G20 summit in Rome have expressed “broad support” for a landmark deal to establish a 15 per cent global minimum corporate tax that aims to deter multinational corporations from using clever accounting to elude taxes by using low-rate havens.
They discussed the proposal during the opening session of the summit on Saturday, officials from the host country said. Following formal approval to be reflected in Sunday’s closing statement, countries would enact the minimum tax on their own.
The idea is that countries with corporate headquarters would top up a company’s tax to 15 per cent if the firm’s profits went undertaxed in another country. In today’s digital and global economy, profits can come from intangibles such as copyrights and trademarks, and can thus be easily shifted to countries offering near-zero taxes in hopes of attracting revenue they otherwise wouldn’t have.
A key question is whether the U.S. Congress will pass legislation to comply, since the United States is home to 28 per cent of the world’s 2,000 largest multinationals.
Meanwhile, thousands of people marched in Rome on Saturday to call on G20 leaders to act against climate change and ensure fair access to COVID-19 vaccines.