Angela Merkel at the G20 summit in Rome: the global minimum tax is a "signal of fairness"

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Olaf Scholz and Angela Merkel at the G20 meeting in Rome

Photo: Oliver Weiken / dpa

Chancellor Angela Merkel (CDU) welcomed the G20's planned introduction of a global minimum tax for companies.

"That is a clear signal of justice," said Merkel on Saturday on the sidelines of the G20 summit in Rome.

"The minimum corporate taxation is a great success."

At their summit, the heads of state and government of the G20 countries gave the green light to a global minimum tax of 15 percent for global companies.

US Treasury Secretary Janet Yellen spoke in Rome of a "historic" step.

This will end the “harmful race to the bottom in corporate taxation”.

The host of the G20 summit in Rome, the Italian Prime Minister Mario Draghi, spoke of an event steeped in history.

"We have reached an historic agreement for a fairer and more efficient international tax system," Draghi said.

US President Joe Biden also praised the agreement.

The main aim of the reform is to prevent corporate profits from shifting to tax havens. Large, internationally active companies should therefore pay at least 15 percent tax regardless of their headquarters by 2023 at the latest. If a company with its subsidiary pays less taxes abroad, the home country can collect the difference. In addition, profitable, globally operating digital companies such as Amazon and Google should no longer be taxed only in their mother country, but also where they do good business.

As part of the Organization for Economic Cooperation and Development (OECD), 136 countries had already approved the planned reform at ministerial level.

The countries together account for a good 90 percent of global economic output.

Well-known tax havens such as the Cayman Islands and countries such as Ireland, which resisted until the end due to their low tax rates, are also included.

In the German Ministry of Finance it was expected that the tax reform could generate additional income of around 7.8 billion euros in an initial phase.

Worldwide, the OECD recently reckoned with an additional tax revenue of 150 billion dollars as a result of the minimum tax.

Merkel comes together with Scholz

At the summit, Merkel presented her likely successor Olaf Scholz (SPD) on the international stage.

US President Joe Biden had a brief meeting with Merkel and Scholz on the sidelines of the summit, according to the US delegation.

Merkel also took the SPD politician to a meeting with French President Emmanuel Macron;

the three politicians had themselves photographed together.

Scholz is actually in his capacity as Federal Minister of Finance in Rome.

Merkel had invited him to accompany her to their bilateral meetings.

According to information from her environment, the Chancellor wanted to send a signal of continuity on the international stage in view of the imminent change of government in Germany.

sol / dpa / afp