Global plans to ensure that big international companies like Amazon and Google pay their “fair share of taxes” have cleared another hurdle following a meeting in Venice of the world’s top finance ministers.
In June, the G7 group of nations endorsed proposals to change international tax rules.
This weekend, the finance ministers of the G20 – an economic group that represents 19 countries and the European Union, representing more than 80% of world GDP and 75% of world trade – gave their support to the new tax proposals.
If passed, it would go some way to ensuring that large multinationals pay their fair share of tax in the countries where they operate and to introduce a global minimum rate that ensures companies pay at least 15% of tax. income tax in each country where they operate.
The proposals – which took years to get to this point – have been described as “historic” leading to a “seismic shift” in the way companies operating around the world are taxed.
To ensure that momentum is not lost, financial leaders have called for the new rules to be ratified by October and for countries that have not yet signed to do so.
The proposals aim to end situations where companies can make profits in one country and transfer them to another where tax rules are more generous.
In a statement, the Chancellor of the United Kingdom, Rishi Sunak, reiterated that the global tax system must be “adapted to its needs in the digital age”.
“We must continue this momentum over the coming months and work together as an international community to create a fairer tax system, which clamps down on tax evasion and levels our main street,” he said.
His comments were echoed by Janet Yellen, the US Secretary of the Treasury, who said that on the introduction of a global corporate tax there was now “a broad consensus on how to proceed”.
The European Commission – which also attended the meeting – gave its support to new tax plans which it said would “bring fairness and stability to the international framework for corporate taxation” and inaugurate a “comprehensive reform of the international tax system. ‘corporation tax’.
Despite coordinated public support, finance ministers and global banking officials still have a long way to go before the proposals are adopted. ®