The G20, comprised of the leaders of the world’s largest economies, has decided to universally agree to endorse a deal stipulating that a global minimum corporate tax of 15% be enforced. This decision was reached following a two-day G20 summit, after which a draft of the plan was revealed on Saturday.
The conclusion of the deal’s draft read as follows: “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 G20’s endorsement comes after 136 countries in October agreed on a global minimum tax to be enforced on multinational corporations such as Amazon, Apple, Facebook, Google, and Microsoft. This tax would ensure that it becomes increasingly challenging for these companies to avoid taxation by setting up offices in low-tax jurisdictions.
According to one U.S. official close to the matter, this G20 deal is not just a tax deal, but rather a step towards reshaping the way that business is conducted across the global economy. The draft’s conclusion is expected to be formally adopted on Sunday.
