The leaders of the Group of 20 have unanimously approved a tax global minimum to large companies, as the US Treasury Secretary Janet Yellen described as beneficial to employers and workers,
Months ago the finance ministers of the Group of 20 had agreed to a minimum tax of 15% to discourage companies from using accounting resources to evade taxes in tax havens, and its approval was taken for granted at the Rome summit of the main economies of the world.
Yellen predicted in a statement that the agreement on global tax rules, with a global minimum tax, “will put an end to harmful competition to the end for corporate taxation.”
After formal approval, which will be reflected in the final declaration on Sunday, each country would apply the minimum tax on its own. The idea is that the host country of a company would raise its taxes to 15% if its profits benefit from lower rates in another country.
In today’s digital and global economy, benefits can come from intangibles like copyrights and trademarks, which can easily be transferred to countries that apply near-zero taxes to attract income they would not otherwise have.
A crucial issue is whether the US Congress will pass a law that meets the standard, since the country is home to 28% of the 2,000 largest multinationals in the world.
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