Biden, other G-20 world leaders formally endorse groundbreaking global corporate minimum tax
Last edited Sat Oct 30, 2021, 07:17 AM - Edit history (1)
Source: Washington Post
ROME — President Biden and the other national leaders gathered for the Group of 20 summit formally endorsed a new global minimum tax on Saturday, capping months of negotiations over the groundbreaking tax accord. The new global minimum tax of 15 percent aims to reverse the decades-long decline in tax rates on corporations across the world, a trend experts say has deprived governments of revenue to fund social spending programs.
The deal is a key achievement for Treasury Secretary Janet Yellen, who made an international floor on corporate taxes among the top priorities of her tenure and pushed forcefully for swift action on a deal.The plan was already endorsed by the finance ministers of each country, but its official approval by the heads of state puts added pressure on the difficult task of turning what remains an aspirational agreement into distinct legislation. Nearly 140 countries representing more than 90 percent of total global economic output have endorsed the deal, but they each must implement the new standards in a process that could take some time.
“What it will provide is a level playing field globally, where companies and countries can compete on the basis of their innovative ideas, fundamentals, the quality of workforce and their business environments,” Yellen told CNBC on Friday. “Countries around the globe have decided that to finance the public infrastructure investments that they need to invest in their people, and not to have all of the burden of raising taxes full on workers … this is a way to make sure that all countries in a fair way.” The tax deal includes not just a new global minimum tax but a separate — and arguably more controversial — overhaul of how multinationals are taxed when earning profits in countries where they have no physical presence.
That related but distinct tax deal is intended primarily to address anger in Europe over the U.S.-based tech giants that pay little in taxes in European countries despite earning substantial sums there. Several European leaders have said they see the measures as tied together. The new tax accord faces criticisms from conservatives who say it will stifle innovation and economic growth, as well as liberals who say it does not do enough to raise new revenue from large multinational corporations and could hurt poor nations. Skeptics also note that key details in the plan, particularly pertaining to the part of the tax agreement related to taxing multinational tech firms, remain unresolved and that leaders could confront disagreements when bringing the plan to fruition.
Read more: https://www.washingtonpost.com/us-policy/2021/10/30/biden-g20-global-minimum-tax/
Limited article non-paywall earlier article -
ROME, Oct 30 (Reuters) - Leaders of the world's 20 biggest economies (G20) will endorse an OECD deal on a global minimum corporate tax of 15%, draft conclusions of the two-day G20 summit showed on Saturday, with a view to have the rules in force in 2023.
"We call on the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting to swiftly develop the model rules and multilateral instruments as agreed in the Detailed Implementation Plan, with a view to ensure that the new rules will come into effect at global level in 2023," the draft conclusions, seen by Reuters, said. The conclusions are to be formally adopted on Sunday.
In October, 136 countries reached a deal on a minimum tax on global corporations, including internet giants like Google (GOOGL.O) , Amazon (AMZN.O), Facebook (FB.O), Microsoft (MSFT.O) or Apple (AAPL.O) to make it harder for them to avoid taxation by establishing offices in low-tax jurisdictions.
"This is more than just a tax deal, it's a reshaping of the rules of the global economy," a senior U.S. official told reporters.
https://www.reuters.com/business/g20-leaders-endorse-global-minimum-corporate-tax-deal-2023-start-2021-10-30/
= new reply since forum marked as read
had supposedly signed onto the deal over the summer -
Richard Partington Economics correspondent
Thu 1 Jul 2021 14.47 EDT
By Leigh Thomas
(snip)
Some countries, however, including Ireland, Hungary and Estonia, have yet to sign up to the reforms, which are being negotiated with 139 participants in talks organised by the Paris-based OECD.
The others not to have signed at this stage are Barbados, Kenya, Nigeria, Sri Lanka and St Vincent & the Grenadines. Peru abstained because it currently does not have a government.
Several jurisdictions with low or zero corporation tax rates commonly regarded as tax havens – including the Cayman Islands and Gibraltar– were among signatories to the deal. Sources close to the process said it was clear to these places that the “writing was on the wall”.
(snip)
https://www.theguardian.com/business/2021/jul/01/global-tax-reform-130-countries-commit-to-minimum-corporate-rate
and later, in early October, Ireland finally relented -
By DAVID McHUGH and DANICA KIRKA October 11, 2021
(snip)
On Thursday, Ireland announced that it would join the agreement, ditching a low-tax policy that has led companies like Google and Facebook to base their European operations there.
Although the Irish agreement was a step forward for the deal, developing countries have raised objections and Nigeria, Kenya, Pakistan and Sri Lanka have indicated they will not sign up.
(snip)
https://apnews.com/article/joe-biden-business-ireland-europe-economic-policy-e9d41bb030271808cd045c62bd6fb6d3
This has also put the onus on Sinapore too, to "fix" how they do their corporate tax that says one thing "on paper" but does another "in reality".
The non-signatories so far, offer an interesting dilemma to the these corporations for obvious reasons.
they know the Nigerian billionaires are as greedy or worse than them.
For example, this news - https://www.democraticunderground.com/10142815227 where you have this (Lebanese-) Nigerian billionaire - https://www.democraticunderground.com/?com=view_post&forum=1014&pid=2815246
I expect there would be a WHOLE lot of "pay to play" in there and it might not be worth the effort. 
That should finance a lot of good programs.
