Today in Venice there will be a historic signature. As part of the G20, in fact, the agreement on the global tax will be given to multinationals to block the phenomenon of tax havens.
The G-20, which since yesterday brings together the finance ministers and central bank governors of the group’s members, represents a historic step in the fight against global tax evasion.
The signature and terms may still vary but not the essence of the law introducing a minimum corporation tax of “at least 15%” on the profits of the world’s largest companies.
The OECD has worked for more than seven years on this project but only the latest G7 was decisive in reaching an agreement that will ensure that giants like Amazon, Google or Facebook pay more to the tax authorities in the countries in which they operate.
Joe Biden and his Treasury Secretary Janet Yellen contributed greatly to something truly historic.
Yellen will use the G-20 summit to put pressure on the rest of the countries with the idea of increasing the rate now fixed by a minimum of 15%. To this tax will be added a system of redistribution of corporate tax rights, which will affect groups with a turnover of at least $ 20 billion and a profit margin of more than 10% on a global scale.
Most of these multinationals operate through tax havens or states with extremely favorable tax systems such as Ireland. So they pay low rates where they are based and pay nothing in the countries where they sell their products and do a lot of business.
The measure, as envisaged by the OECD, would bring about $ 150 billion in additional tax revenues. Now the current regulation disperses about 200,000 million from the public coffers of the states every year.
The agreement includes two key measures, defined as the first and second pillar. The first pillar assumes that if the multinational has a profit margin of more than 10% with a turnover of more than 20,000 million, a portion of the profits that exceed that 10% will be redistributed in the countries where the group to be taxed operates. The financial and mining sectors are excluded from this regime.
The second pillar, on the other hand, is a minimum corporate tax rate of “at least 15%” that countries can collect from their multinationals, with a turnover of more than $ 750 million, if they are taxed at a lower rate. in the territories where they work.
The countries that are asking to increase the minimum corporate tax, however, are more and more except some reluctant countries such as Ireland, Estonia and Hungary, which have not signed the OECD agreement also because their corporate taxes are 9% and 12.5%. Far below the European average of 22%.