G20 leaders back global minimum tax to shut down tax havens

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A happy start for President Biden at the G20 summit in Rome on Saturday.
Photo: Antonio Masiello/Getty Images

During the first day of the G20 summit in Rome, the leaders of the world’s 20 largest economies officially approved a redesign international corporate tax rules, which aims to prevent companies from seeking foreign tax havens. The agreement was a major objective of the Biden administration and is seen as a key part of President Biden’s and Democrats’ plans to increase tax revenue in the United States

The agreement, backed by nearly 140 countries around the world, would set a global minimum tax of 15% and force large multinational companies to pay taxes in the countries where they do business. According to the hill, which would generate $60 billion or more in additional revenue per year in the United States alone. The new rule will be formalized when leaders issue a final G20 communiqué on Sunday at the end of the summit.

“The deal works because it removes incentives to outsource American jobs, it will help small businesses compete on a level playing field, and it will give us more resources to invest in our employees at home. “said a White House official. mentioned. “In our view, this is more than just a tax deal. It is an overhaul of the rules of the global economy.

“We have reached a historic agreement for a fairer and more efficient international tax system,” said Italian Prime Minister Mario Draghi, leader of this year’s G20. said at the top. “These results are a powerful reminder of what we can achieve together.”

The global minimum tax had been agreed by finance ministers from the world’s biggest economies earlier this year, but Saturday’s session represents the first time the countries’ heads of state have given the go-ahead. Negotiations over important aspects of the plan could take some time, especially since each nation must adopt its own version of the tax, but Saturday’s approval suggests it is on the right track.

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