The meeting of finance ministers and central bank governors of the Group of Twenty (G20) in Venice, northern Italy, closed after passing a joint statement on the 10th. In order to curb competition for the reduction of corporate income tax, the meeting reached an agreement on the adoption of a minimum tax rate of “15% or more” by all countries. Taking into account US IT giants such as Google and Apple, the meeting also reached a consensus on “digital taxation” to prevent tax evasion by multinational companies.
G20 stated in a statement that “the remaining issues will be resolved quickly before the next meeting in October.” At a press conference after the meeting, Japanese Finance Minister Taro Aso emphasized that “this will be a historic change in the (international taxation system) over the past 100 years.”
The Working Conference of the Organization for Economic Cooperation and Development (OECD) reached a framework agreement on the implementation of enhanced taxation in 132 countries and regions in 2023 on the 9th of this month. The G20 ministers of emerging market countries, including China and India, approved it, which is a big step forward for the realization of reforms.
However, Ireland and Hungary, which are not members of the G20 and adopt a lower corporate income tax than 15%, did not express their support or opposition at the OECD meeting. In its statement, the G20 called for “hope all countries and regions to participate in this international agreement.”
The target of digital taxation is about 100 multinational companies with global sales exceeding 20 billion euros (approximately 153.8 billion yuan) and a profit margin of more than 10% of sales. There are also countries in Europe and other places that have introduced their own taxation system for IT giants. France said that after digital taxation takes effect, its own taxation system will be withdrawn.
The G20 statement warned against inflation caused by the overheating of the US economy, stating that “price stability” must be taken into account. It is also proposed that discussions on global warming measures such as “carbon pricing” based on a tax on carbon dioxide (CO2) emissions will be promoted. China participated in the conference online.