G20 countries have approved “historic” deal on taxation of multinationals

Published on : 07/10/2021 – 19:02Modified : 07/10/2021 – 19:03

The big funders of the G20 “approved” Saturday July 10 the agreement “historic on a more stable and fairer international tax architecture”, which establishes a world tax of “at least 15%” on the profits of multinationals, have- they announced in a statement.

Finance ministers also appealed to recalcitrant countries, the declaration having been signed so far by 132 of the 139 members of the OECD working group which brings together advanced and emerging countries.

“We invite all members” of this group called “inclusive framework” OECD-G20 who “have not yet joined the international agreement to do so,” said the ministers. An appeal that was heard by Saint Vincent and the Grenadines, a small Caribbean country that has joined the agreement.

Big funders also called on the group “to deal quickly with the remaining issues” and to present “a detailed plan for the implementation of the two pillars” of the agreement by the next G20 meeting in October.

The Gafa targeted

The “pillar 1” of the agreement consists in reallocating part of the income tax paid by multinationals to the so-called “market” countries, ie those where they carry out their activities. The tax will therefore no longer be due only where their headquarters are located.

In the line of sight, companies which achieve more than 20 billion euros of turnover worldwide and whose profitability exceeds 10%.

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Its objective: to prevent multinationals and especially the Gafa (acronym designating the giants Google, Amazon, Facebook and Apple), which have greatly benefited from the Covid-19 pandemic and the confinements, from paying derisory taxes in relation to their income.

The “pillar 2” corresponds to the establishment of a minimum effective tax rate “of at least 15%” on the profits of multinationals. A state will be able to tax the foreign profits of one of its national companies which would have been taxed abroad at a rate lower than this minimum rate, in order to compensate for the difference.

“A decisive G20 that marks a before and after”

The deal sparked a chorus of enthusiastic reactions, from US Treasury Secretary Janet Yellen who called on the world “to act quickly to finalize” the reform, to European Economic Commissioner Paolo Gentiloni who spoke of a “victory for tax fairness “.

The French Minister of the Economy Bruno Le Maire felt, in a written statement sent to AFP, that “there is no going back possible”. “The G20 Finances in Venice is a decisive G20 which marks a before and an after”, he welcomed, calling to “effectively implement the reform of international taxation by 2023”, which notably provides for a tax world minimum of at least 15%.

With AFP