July 14, 2024

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G-20 Hoping to Agree on Minimum Corporate Tax Rate in July

U.S. Treasury Secretary Janet Yellen will press G20 counterparts this week for a global minimum corporate tax rate above the 15 percent floor agreed by 130 countries last week, but a rate decision is not expected until future phases of negotiations, U.S. Treasury officials said on Tuesday, Reuters reports.

The countries outlined a global minimum tax and the reallocation of taxing rights for large, highly profitable multinational firms.

The deal is widely expected to be endorsed by G20 finance leaders when they meet on Friday and Saturday in Venice, Italy.

The G-7 finance ministers on Saturday sealed a landmark deal in London, paving the way to help countries collect more taxes from big companies and setting a minimum global corporate tax rate of at least 15%. That would signal an end to decades of nations racing each other to lower levies, eroding their collective revenues.

Yellen’s role was “crucial” and “decisive,” European Union economy chief Paolo Gentiloni said at a press conference at the conclusion of the G-7 meeting. He said that “six months ago, we were in the middle of nowhere.”

The meeting comes just days after 130 out of 139 countries in the Organization for Economic Cooperation and Development agreed to a global minimum tax of at least 15%, an agreement that the White House has touted as historic. While the deal is only in broad strokes, the world’s largest countries are set to determine the details of the proposal over the coming months.