The world’s largest economy will put pressure on countries this weekend refusing to sign a global tax reform agreement that imposes a minimum tax on multinational corporations.
The G20 Minister of Economy and Central Bankers met in Venice on Friday to discuss the proposal. G7 countries agree Last month, we received support from 130 countries at a meeting hosted by the OECD in Paris earlier this month.
They are expected to formally approve an agreement that will force the world’s largest multinationals to pay the world’s lowest corporate tax rate in a communiqué announced Saturday after the meeting.
The OECD proposal also seeks to establish a system in which countries tax some of the profits recorded by large corporations based on where they were generated.
A draft communiqué leaked Friday and validated by G20 officials in the Financial Times urges all countries to make concessions by the time G20 leaders meet in Italy in October.
Officials from several G20 countries have said that the exact wording of the communiqué has not yet been finalized, but officials from one large country said the approval of the agreement by the G20 meant “there was no turning back.” It was.
Eight countries, including Ireland, Barbados, Hungary and Estonia, have postponed a 15% minimum levy agreement backed by the United States, China, India and most EU countries. Other holdouts include Sri Lanka, Nigeria, Kenya, St. Vincent and the Grenadines. Some low tax jurisdictions and investment hubs, such as the Bahamas and Switzerland, are already registered.
Peru was initially unregistered due to the lack of government at the time of the agreement, but is now registered and has 131 signatories to date.
Political support for the G20 will give momentum to efforts to reach a final agreement expected to be implemented by 2023, but important technical issues remain and could be resolved this weekend. Is low.
These include various so-called “curve-out” agreements that allow some countries to use opt-outs from transactions to encourage investment.
Another hurdle is expected to be Republican opposition in the US Congress. President Joe Biden may require parliamentary approval for at least some of the elements of the proposal.
Kevin Brady, a top Republican member of the House’s Commission on Methods and Means, described the deal as “a dangerous economic surrender to send US employment abroad.”
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