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Financial leaders of the Group of 20 major economies said they had reached an agreement on how to move forward on a “more stable and fairer international tax architecture,” according to a statement released on Saturday to the outcome of the meeting.
The G-20 is a forum for governments and central bank governors of 20 major economies. At a meeting of the group’s finance ministers and central bank governors, leaders approved elements of a tax plan, including the reallocation of profits from multinational companies and a global minimum tax after “many years of discussions and building on the progress made last year, ”they wrote.
The group will aim to get national leaders to approve the plan at a G-20 summit in October.
According to Reuters, the pact would establish a global minimum corporate tax of at least 15% in an attempt to prevent multinationals from seeking the lowest tax rate. The deal would also change the way companies like Alphabet’s Amazon and Google are taxed, basing it in part on where they sell products and services, instead of the location of their corporate headquarters.
Reuters reported that German Finance Minister Olaf Scholz has confirmed that all G-20 economies are in agreement with the pact. Meanwhile, US Treasury Secretary Janet Yellen said a handful of small countries are still opposed, including low-tax countries such as Ireland and Hungary, but will be encouraged to sign up. by October.
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