G20 finance ministers support the setting of the world’s lowest corporate tax rate

The Finance Association (Shanghai, editor Xiaoxiang) reported that the finance ministers of the Group of Twenty (G20) are scheduled to hold a two-day meeting in Venice, Italy this Friday and Saturday. According to a draft communiqué seen by the media, the G20 finance ministers generally support the proposal to set the world’s lowest corporate tax rate to prevent multinational companies from transferring their profits to a low-tax paradise. This is expected to put an end to the eight-year debate. And promoted the leaders of all countries to sign at the Rome summit in October.

U.S. Treasury Secretary Yellen said after a meeting with German Treasury Secretary Scholz on Saturday that she will try to resolve the concerns of countries unwilling to sign the tax agreement in the next few months. She also emphasized that not every country must participate in this tax agreement.

In an interview, Yellen pointed out that she believes that some of the concerns of countries such as Ireland, Estonia and Hungary can be resolved before the G20 summit in October. Yellen said, “We will work hard to do this, but I also emphasize that not all countries must be involved.”

“This agreement contains an enforcement mechanism that can be used to ensure that countries that disagree can’t destroy it—using tax havens to disrupt the operation of this global agreement.”

Yellen said that the OECD tax agreement agreed in principle by 131 countries and jurisdictions and currently supported by the G20 government is beneficial to governments around the world and will end the “race to the bottom” of countries competing to cut corporate tax rates. “, thereby increasing fiscal revenue.

When asked how she will get the disagreeing U.S. Congress to agree to the agreement, Yellen said that she is working with Congress’s tax drafting committee to develop a budget resolution that will use budget “reconciliation” rules. These rules will allow a simple majority to pass in the U.S. Senate. Currently in the Senate, as long as the Democratic senators are unanimous, they will have the votes to pass.

Yellen said, “I am very optimistic that the bill will include what the United States needs to comply with the second pillar plan.”

German Finance Minister Scholz also said on Saturday that the G20 has made significant progress in tax reform, and all G20 countries support this tax agreement to prevent multinational companies from transferring profits to low tax havens. Scholz said, “Today, we see that all countries participating in the meeting will support this international process in order to find a minimum taxation method.”

According to the draft communiqué seen by the media, all the G20 finance ministers are expected to agree to the recent agreement reached under the auspices of the OECD to determine a minimum corporate tax rate of 15% and tax the profits of multinational companies at the national level. Industry insiders predict that if everything goes according to plan, the new tax regulations should be able to translate into binding legislation on a global scale before the end of 2023.