A global corporate tax? Here is how it would work | World

Leaders of the world’s 20 largest economies on Saturday approved a global minimum tax aimed at preventing large corporations from hiding their profits in tax havens, and also agreed to send more COVID vaccines to poorer countries. Fred Katayama reports.

Leaders at the Group of 20 summit in Rome this weekend are expressing broad support for sweeping changes in the way large global corporations are taxed.

The objective: to dissuade multinationals from hiding their profits in countries where they pay little or no taxes, commonly called tax havens.

With final group approval expected in Sunday’s summit declaration, the proposal had already been finalized in October between 136 countries and sent to the G-20 for a final review after complex talks overseen by the Organization for Cooperation and Cooperation. economic development.

The measure would update a century of international tax rules to cope with the changes brought about by digitization and globalization.

The most important feature: a global minimum tax of at least 15%, a key initiative pushed by US President Joe Biden. β€œIt’s more than just a tax deal – it’s diplomacy that is reshaping our global economy and serving our people,” Biden tweeted at the summit on Saturday.

Treasury Secretary Janet Yellen said it would end a decades-long ‘race to the bottom’ that has seen corporate tax rates drop as tax havens seek to attract companies that used smart accounting to take advantage of low rates in countries where they had little real activity.

Here is an overview of the main aspects of the tax agreement:

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