US Treasury Secretary Janet Yellen last week urged the adoption of a minimum global corporate income tax, citing a ‘30-year race to the bottom’ in which countries have slashed corporate tax rates to attract multinational businesses
On Wednesday, Italian Finance Minister Daniele Franco said after a meeting of finance ministers and central bank governors that the G20 was ‘committed to reaching an agreement, hopefully we expect it to take place in July’
Italy’s finance minister said on Wednesday that Group of 20 advanced economies hope by a ministerial meeting in July to have reached an agreement on international taxation, an issue being pressed by US Treasury Secretary Janet Yellen.
While international taxation reform has been in discussion for several years, Finance Minister Daniele Franco said there has been an “acceleration in the process” this year.
“It has been said that this is possibly the most ambitious work on taxation in a multilateral setting,’’ he said.
Yellen last week urged the adoption of a minimum global corporate income tax, citing a “30-year race to the bottom” in which countries have slashed corporate tax rates in an effort to attract multinational businesses. She said the Biden administration would work with the other advanced economies of the Group of 20 (G20) to set a minimum.
Yellen stressed that competitiveness is about ensuring governments have stable tax systems and revenue to “invest in essential public goods.”
The discussions are focused on two pillars of global international taxation: The fair allocation of profits among different countries where multinationals operate, and the global minimum effective tax rate, Franco said.
“The G20 is committed to reaching an agreement, hopefully we expect it to take place in July,” when economy and finance ministers are scheduled meet in Venice, he said.
Italy took over the rotating presidency of the G20, an international forum bringing together major economies that cumulatively account for more than 80 per cent of the world’s gross domestic product, in December.
We will continue our cooperation for a globally fair, sustainable, and modern international tax system. We remain committed to reaching a global and consensus-based solution
Economy and finance ministers will check in on progress on issues in Venice, and a global summit is planned for October. Climate change and tax policy are on the agenda for July.
“We will continue our cooperation for a globally fair, sustainable, and modern international tax system. We remain committed to reaching a global and consensus-based solution building on the solid basis of the Reports on the Blueprints for Pillar 1 and Pillar 2, by mid-2021,” said the official communique following the second G20 finance ministers and central bank governors meeting on Wednesday.
“We acknowledge the progress made to date and urge the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) to address the remaining outstanding issues with a view to achieving an agreement by the set deadline.
“We acknowledge the progress made on implementing the internationally agreed tax transparency standards and support the Organisation for Economic Cooperation and Development’s (OECD) ongoing work to explore proposals for automatic exchange of information on cryptoassets. We look forward to a constructive discussion at the High Level Tax Symposium on Tax Policy and Climate Change in July.”
