Global leaders of the world’s 20 largest economies agreed on Saturday to advance a proposal to establish an international corporate tax of at least 15% to prevent multinational companies from taking advantage of the low tax rates in some countries.
This G20 plan marks the most significant reform of the international tax system in decades and has the potential to reshape the global economy, including where companies choose to operate and who collect taxes.
The details of the plan are still unclear, and the finance ministers must finalize the proposal by October before they can reconvene the meeting at the summit in Rome.
“After years of discussions and on the basis of the progress made last year, we have reached a historic agreement on a more stable and fairer international taxation structure,” the finance minister said in a statement. Joint Statement At the end of the meeting.
This landmark transaction may also disrupt the global economy.
Experts tell CNBC Cross-border tax loopholes may ultimately fail to eliminate the incentive for some of the world’s largest companies to transfer profits abroad. Some even describe the proposed reforms as “shocking” unfair to low-income countries.
At present, 132 countries have joined the G20 “Inclusive Framework” But there are a few Low-tax country Not so enthusiastic about the terms of the deal.
The deal is expected to affect many companies, including Amazon, Google and Nike.
“As far as the business model of corporate tax havens is concerned, this is really going to be a huge shift. Alex Cobham, CEO of Tax Justice Network, told CNBC that this will not be an absolute end, but the transaction is well defined. The stricter, the more comprehensive the business model.
