The richest countries on the planet are calling on the seven recalcitrant to join the new architecture of global taxation.
Special envoy to Venice
The G20 finance ministers on Saturday approved an agreement “ historical On international taxation which provides for a minimum tax of at least 15% for multinationals. The project, approved by 132 countries under the aegis of the OECD, now has the political force of a text endorsed by the nineteen richest countries in the world and the European Union, at their summit in Venice.
It now remains to finalize certain technical modalities, overcome remaining political obstacles and overcome isolated resistance, by a meeting of heads of state and government in Rome in October to finalize it.
“ It’s a tax revolution like there is one per century “, Welcomed the French Minister of the Economy Bruno Le Maire, according to whom” there is no going back “. Implementation is scheduled for 2023. “ We must not lose the momentum », Continues the occupant of Bercy.
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This dynamic should, according to him, overcome the resistance of seven countries which are still reluctant to endorse the agreement, including three Europeans. The tax haven of St Vincent and the Grenadines finally joined the 131 other signatories, leaving Barbados alongside Ireland, Estonia, Hungary, Kenya, Nigeria and Sri Lanka in the opponents’ camp .
Negotiation in the US Congress
“ We invite all members who have not yet joined the international agreement to do so. ”, Urges them in the final G20 communiqué. US Treasury Secretary Janet Yellen noted that “ was not essential that all countries participate So that the reform can succeed. “A country can decide to approve or not but, with the G20 and 132 countries representing 90% of global GDP, the pressure is strong. There is a strong political will to reach an agreement ”, said the host of the summit, the Italian Minister of Economy Daniele Franco.
The future of the project rests more on the ability of the Biden administration to pass it through Congress. Janet Yellen said she was confident to achieve this, engaged in so-called “ reconciliation With the Republican minority and some Democrats reluctant to remove the risk of a blockage.
The reform is based on two “ pillars “. The first plans to tax locally the profits of the hundred of the largest multinationals in the world (above 20 billion dollars in turnover). The second establishes a minimum tax of 15% on the profits of all companies with turnover exceeding 750 million euros.
The United States, France and Germany say they are in favor of a rate higher than the 15% proposed, as do the majority of emerging countries, such as Argentina. Washington pleads for 21%. If the hope of achieving this is slim, it should be the subject of negotiations in the coming months. Another detail to be finalized is the local profit redistribution rate. A range between 20 and 30% was left open. Paris pushes for 25%, which Washington seems ready to support.
The controversy between Europeans and Americans on digital taxation remains to be resolved. The European Commission plans to introduce a tax, independent of the device approved by the G20, of 0.3% on online sales, to finance the reimbursement of the Next Generation EU stimulus fund. Washington asked him to postpone this project, perceived as double taxation. From Venice, Janet Yellen must fly to Brussels, where she must discuss this thorny subject with her European counterparts on Monday. Several European states are pleading for a suspension, a revision or even an abandonment of the European project, considered unwelcome.
The G20 also welcomes the strength of the economic recovery, but is concerned about the divergences between regions of the world and the risks to growth due to “the spread of new variants of Covid-19 and the different vaccination rates“. “ We agree that we should avoid reimposing new restrictions on the mobility of populations », Says Italian Minister Daniele Franco.
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