DW – July 9, 2021
The Italian city of Venice is set to host a summit of finance ministers and central bankers from the G20 countries on Friday.
Top of the agenda is implementing a global tax reform, spearheaded by the US Treasury Secretary Janet Yellen, that proposes a minimum corporate income tax of 15%.
Some 130 countries already backed the plan, brokered by the Paris-based Organization for Economic Cooperation and Development (OECD).
The minimum tax rate would bring in an estimated $150 billion (€127 billion) in additional tax revenues globally.
Who benefits most from tax reform?
The G20 members, which comprise the world’s largest economies and account for over 80% of global GDP, are expected to be the main winners from the planned tax reform.
Tax havens that slashed their corporate taxes to incentivize multinational companies to set up headquarters there would lose out the most.
Nevertheless, many, such as Panama and Bermuda, have signed up.
Countries will have until the end of 2023 to put the proposed tax reform into law. But ministers may question the ability of the US government to get such a proposal through the hotly divided US Congress where Republicans have already fought against US President Joe Biden’s domestic tax plans.
Pockets of resistance
Not all countries have agreed to the deal, however, with EU member states Ireland, Estonia and Hungary holding back.