Global tax reform: G20 countries should approve minimum tax for companies

Enlarge image

Olaf Scholz (SPD) and US Treasury Secretary Janet Yellen at the G20 summit in Venice: Global minimum tax in sight

Photo: Bernd von Jutrczenka / dpa

According to Federal Finance Minister Olaf Scholz, the leading industrialized and emerging countries are supporting the planned global tax reform. All countries at the G20 meeting in Venice had backed the plans for a worldwide minimum tax for companies, said the SPD candidate for chancellor in a joint statement with US Treasury Secretary Janet Yellen. "We worked really hard in the past few weeks, but we made it," said Scholz during the meeting.

The planned minimum tax of 15 percent and the new distribution of taxation rights among the states should be implemented as soon as possible.

"Our goal is for the agreement to come into force in 2023," said the German finance minister.

The final questions should be clarified by October this year.

"That is very, very little time." But we have come a long way.

"All of this is really a big step forward."

Under the umbrella of the industrialized countries organization OECD, 131 countries around the world have already approved the plans at working level.

The minimum tax of 15 percent is intended to prevent companies from relocating their headquarters to low-tax countries and to prevent the states from lowering their company taxes in competition with one another.

In addition, international companies should not only pay taxes in their home countries in future, but also where they do good business.

This affects, among other things, large digital corporations, which so far often pay little taxes overall - and often significantly less than medium-sized companies.

Emerging countries should get more tax revenue.

Eight countries - including Ireland, Hungary and Estonia from Europe - refused to sign.

Scholz speaks out indirectly against the new EU digital levy

However, the EU Commission wants to present plans for a European digital levy shortly. According to EU Economic Commissioner Paolo Gentiloni, this will not be directed against American corporations and will not be comparable to a digital tax. According to experts, the USA has recently pushed the international negotiations on the minimum tax forward strongly in order to prevent a patchwork of numerous national digital taxes or similar charges.

At the G20 meeting, US Treasury Secretary Yellen urged an end to European digital taxes if the planned global tax reform is to be implemented.

She hoped that the international agreement on a redistribution of taxation rights would make it possible to get rid of existing digital taxes, she said.

In the EU, for example, France single-handedly introduced a digital tax as early as 2019.

The USA under US President Donald Trump then threatened punitive tariffs

Scholz also campaigned for a global solution - and thus indirectly spoke out against a European special path.

The OECD tax reform already contains new rules for the hundred largest and most profitable corporations in the world, which will also affect many Internet companies.

The planned OECD tax reform is good for all countries, said Yellen.

This will result in more income and end the race to ever lower tax rates.

You will continue to campaign for other countries to join the agreement.

"We will try, but I should stress that it is not essential that all countries are on board."

Scholz recently also said that if German corporations abroad, for example, only pay two percent tax on their profits there, the difference to the new minimum tax in Germany will be levied in future.

abl / dpa / Reuters