G20 ratifies global corporate tax rate of at least 15%

The finance ministers of G20 nations on Saturday greenlighted a tax reform for multinationals that aims to put an end to tax havens around the world by introducing a global corporate tax rate of at least 15 per cent. The G20 gathering was held in the  Italian city of Venice. This was the ministers' first face-to-face talk since the start of the COVID-19 pandemic.

The two-day meeting concluded on Saturday with the adoption of a joint communique, read an NHK World report. The G20 Finance Ministers also backed the group's broad agreement on the introduction of new rules for taxing cross-border businesses.

Countries such as Ireland have tried to attract multinational firms with their lower corporate tax rates. They have not joined the agreement, as per the NHK World report.

During the gathering, the G20 Finance Ministers backed the action of a group of 132 nations and territories to introduce a minimum global corporate tax of at least 15 per cent. The aim behind this agreement is to end the competition between different countries to attract multinationals by lowering corporate taxes.

The final communique released by the G20 Finance Ministers encourages finalising the details of the corporate tax rules by the next G20 gathering, which is scheduled for October. G20 nations will continue negotiations with the hope of reaching a final deal by October 2021.

The G20 is made up of member states of the OECD (Organization for Economic Cooperation and Development).

The group comprises Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the UK, the US, and the EU. Spain has also been invited as a permanent guest.

Also Read: Global economic recovery at risk from rise of new COVID-19 variants: G20

Also Read: COVID-19 variants: Sitharaman calls for global coordination at G20 FMs meet