G20 leaders endorse 15% minimum global corporate tax
CBC
Leaders of the world's biggest economies on Saturday endorsed a global minimum tax on corporations as part of an agreement on new international tax rules, a step toward building more fairness amid skyrocketing revenues of some multinational businesses.
G20 finance ministers in July had already agreed on a 15 per cent minimum tax. Its formal endorsement at the summit on Saturday in Rome of the world's economic powerhouses was widely expected.
The deal did fall short of U.S. President Joe Biden's original call for a 21 per cent minimum tax. Still, Biden tweeted his satisfaction.
"Here at the G20, leaders representing 80 per cent of the world's GDP — allies and competitors alike — made clear their support for a strong global minimum tax," the president said in the tweet.
"This is more than just a tax deal — it's diplomacy reshaping our global economy and delivering for our people."
The agreement aims to discourage multinationals from stashing profits in countries where they pay little or no taxes. These days, multinationals can earn big profits from things like trademarks and intellectual property. These companies can then assign earnings to a subsidiary in a tax haven country.
Briefing reporters midway through the summit, German Chancellor Angela Merkel said: "There are good things to report here. The world community has agreed on a minimum taxation of companies. That is a clear signal of justice in times of digitalization."
Mathias Cormann, secretary general of the Paris-based Organization for Economic Cooperation and Development (OECD), said that the deal clinched in Rome "will make our international tax arrangements fairer and work better in a digitalized and globalized economy."
The minimum rate "completely eliminates the incentive for businesses around the world to restructure their affairs to avoid tax," Cormann contended.
On other issues crucial to fairness across the globe, the summit on the first of its two days heard pleas to boost the percentage of those in poor countries being vaccinated. Italian Prime Minister Mario Draghi made a sharp call to pick up the pace in getting vaccines to poor countries as he opened the conference.
As summit host, Draghi said Saturday that only three per cent of people in the world's poorest countries are vaccinated, while 70 per cent in rich countries have had at least one shot.
"These differences are morally unacceptable and undermine the global recovery," said Draghi, an economist and former chief of the European Central Bank.
Canada on Saturday committed to boosting its existing commitment to COVAX — a vaccine distribution program co-ordinated by the World Health Organization (WHO) and others — by some 73 million more shots: 10 million doses of Moderna and cash to fund the procurement of 63 million doses by the end of 2022.
French President Emmanuel Macron has pledged to use the summit to press fellow European Union leaders to be more generous in donating vaccines to low-income countries.
