The finance ministers of the G20 countries have decided to introduce a global minimum tax for large corporations. At a meeting in Venice, they agreed on a declaration that confirms a decision made by 131 OECD countries last week. A global minimum tax rate of 15 percent and the possibility of taxing companies not only where they are based, but also where they make profits, should prevent tax evasion by large digital corporations such as Amazon or Google in the future.
The Italian Finance Minister Daniele Franco praised the decision as an important achievement that will help stabilize the international tax system. It will increase tax security and end the race for ever lower corporate taxes.
Scholz: “That will make the world better”
The German finance minister and SPD candidate for chancellor Olaf Scholz was also pleased: “That will make the world a better place,” he said in Venice.
In fact, there are still obstacles to the project: For example, the European low-tax countries Ireland, Estonia and Hungary are not included. Scholz hopes to be able to convince the deviants.
Ideally, the reform should come into force in 2023. Following the decision of the G20 states, detailed questions should now be clarified. Among other things, there is still a struggle about how exactly to define corporate profits. Some countries like France would also like a higher minimum tax rate. A multilateral international agreement is to be concluded for the new distribution rules. The minimum tax must be implemented individually in the states.
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