G20 finance chiefs back major tax deal

Finance ministers representing the G20 large economies back a deal setting a global floor for corporate tax rates and will push to resolve outstanding issues on it by October, the latest draft of a joint communique said.

The communique, seen by Reuters, urged any hold-out nations to join the deal. Two sources said the statement was expected to be released without changes at their meeting in the Italian city of Venice due to be wrapped up today.

“We call on [countries involved in the global talks] to swiftly address the remaining issues and finalise the design elements within the agreed framework together with a detailed plan for the implementation of the two pillars by our next meeting in October,” the statement said. “We invite all members [involved in the discussion] that have not yet joined the international agreement to do so.”

The statement, if approved, represents political endorsement of an agreement this month among 131 countries, at talks hosted by the Organisation for Economic Cooperation and Development, on taxation of multinationals’ profits and setting a global minimum corporate tax rate of at least 15 per cent. The aim is to have G20 leaders give it final blessing at in October.

If all goes to plan, the new tax rules should be translated into binding legislation worldwide before the end of 2023. However a fight in the US Congress over President Joe Biden’s proposed tax increases on corporations and wealthy Americans could yet create hurdles.—