G20 finance ministers last week approved a tax reform for multinational corporations that aims to end tax havens. More than 130 nations approved the proposal to introduce a global corporate tax rate of 15 per cent. The ministers reaffirmed that reaching the common goal of net-zero emissions by mid-century is a priority, and that tax policy can help achieve that.

The tax policy is expected to be in place by 2023.

The G20 High Level Tax Symposium on Tax Policy and Climate Change took place in Venice on July 9, ahead of the G20 finance ministers and central bank governors’ meeting on July 9-10 and of the Venice International Conference on Climate on July 11.

The ministers recognised that countries may rely on a mix of policy instruments to reduce greenhouse gas emissions and may achieve their climate objectives with different speed and trajectories, taking into account national specificities, differing degrees of technological development, different availability of resources needed to finance the green transition, according to a press release from G20.

At the same time, the ministers acknowledged the importance of enhanced international cooperation to avoid potential spillovers stemming from unilateral approaches.

Terming the agreement as a ‘victory’, French finance minister Bruno Le Maire tweeted: "We are putting an end to tax optimisation and the digital giants will finally pay their fair share of tax. This is the biggest tax revolution in a century."

His American counterpart, Janet Yellen, said the deal shows "the world is ready to end the global race to the bottom on corporate taxation". The European Union too hailed the G7 tax agreement.

The G20 is made up of Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States, and the European Union. Spain is also invited as a permanent guest.

Together, they account for 60 per cent of the world's population and represent more than 80 per cent of the global gross domestic product and 75 per cent of global trade.

Fibre2Fashion News Desk (DS)

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