G20 finance ministers have supported the proposal to fight multinational companies’ tax avoidance and introduce a minimum global corporate tax rate of 15%. The proposal was first signed at a recent meeting in England by the G7 major economies.
The background is discussion about how countries have competed by having low corporate tax and thereby attracting companies like Facebook and Amazon to register in those countries. For the companies it means that they pay a low tax in countries where they have chosen to register and not in the countries where they make the money.
In Europe, there has been much discussions about Ireland and its low corporate tax which means several of the multinational companies have their European head offices in Dublin.
132 countries have signed up to the new rules that are backed by The Organisation for Economic Cooperation and Development (OECD), it was reported at the G20 finance ministers’ meeting in Venice.
The UK’s Chancellor Rishi Sunak was quoted calling the agreement “historic” and ensuring “global tax system is fit for purpose in a digital age”.