Finance ministers from the Group of 20 leading economies Wednesday said they hope to agree on a minimum tax rate for company profits by the middle of this year as part of a wider overhaul of the way international businesses are taxed.
The finance ministers met virtually two days after Treasury Secretary
Italian Finance Minister
said after the meeting that Ms. Yellen had stressed the need for a minimum rate and that her proposal was consistent with the G-20’s ambitions.
Mr. Franco, who chaired the meeting, said that while finance ministers have yet to resolve some issues needed to bring yearslong talks on overhauling the international tax system to a successful conclusion, they are hopeful of meeting a self-imposed deadline and sealing an agreement at their next meeting.
“What we see this year is an acceleration in the process, and the G-20 is expecting to reach an agreement in July,” Mr. Franco said.
Since October 2019, the G-20 has been negotiating on the basis of a framework developed by the Paris-based Organization for Economic Cooperation and Development that includes a minimum tax rate but also a new way of assigning the profits to be taxed among countries.
Because that new approach focuses more on where businesses have their customers than where their headquarters are located, it would lead to more taxation of U.S. technology companies in Europe and other countries and less in the U.S. In return, the U.S. would be able to raise more taxes from European and other companies selling to American customers.
Mr. Franco said that the G-20 remained focused on agreeing on both of those changes as a package.
While a minimum tax rate appears to have widespread backing among governments around the world, one issue that may prove difficult to settle is the level at which that rate would be set.
Write to Paul Hannon at [email protected]
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