Chancellor welcomes milestone G20 progress on global tax reform
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Chancellor of the Exchequer Rishi Sunak today (10 July) has
welcomed milestone progress on international tax reform during
two-day meetings of G20 Finance Ministers and Central Bank
Governors in Venice. The foundations for the historic agreement on
global tax reform were laid at the G7 in London, and now 132
countries and jurisdictions representing 95% of world GDP have
signed up to the deal within the OECD....Request free trial
Chancellor of the Exchequer
Rishi Sunak today (10
July) has welcomed milestone progress on international tax
reform during two-day meetings of G20 Finance Ministers and
Central Bank Governors in Venice. Following two days of G20 meetings in Venice, including an informal breakfast meeting of the G7 chaired by Mr Sunak, Finance Ministers pledged their full support for the deal and called for outstanding issues to be swiftly addressed at OECD level along with a detailed implementation plan by October. The group also called on countries who have yet to sign up to do so. The seismic global tax deal will change the international rules so that large multinationals pay their fair share of tax in the countries they do business and introduce a global minimum rate that ensures multinationals pay tax of at least 15% on profit in each country they operate. Speaking in Venice, the Chancellor said:
The G20 also reiterated the need for urgent action to tackle climate change and biodiversity loss. The group encouraged international financial institutions to step up their efforts to align their activities with the Paris Agreement and called on the private sector and markets to play their part to support the transition to net zero. Just over seven months after the UK led by example by committing to make climate related disclosures mandatory at home, the G20 committed to promoting implementation of consistent and comparable climate-related financial disclosure and welcomed the International Financial Reporting Standards Foundation’s work to develop global baseline sustainability reporting standards. The G20 also committed to continue supporting the poorest and most vulnerable countries as they address the health and economic challenges associated with COVID. G20 Finance Ministers and Central Bank Governors supported a general allocation of IMF Special Drawing Rights (SDRs) totalling USD $650 billion and urged swift implementation by the end of August. The group also called on the IMF to quickly present options for countries to voluntarily channel a share of their allocated SDRs to help vulnerable countries finance more resilient, inclusive and sustainable economic recoveries. The European Commission welcomes the historic global agreement endorsed by G20 Finance Ministers and Central Bank Governors today, which will bring fairness and stability to the international corporate tax framework. This unprecedented consensus will usher in a complete reform of the international corporate tax system. This will include a reallocation of taxing rights that will mean the world's largest companies will have to pay tax wherever they conduct business. At the same time, a global minimum effective tax rate of at least 15% will help curb aggressive tax planning and stop the corporate tax “race to the bottom.” European Commissioner for Economy Paolo Gentiloni, who is taking part in the discussions in Venice today, said: “The G20 has today endorsed the unprecedented global agreement on corporate tax reform reached last week and now supported by 132 jurisdictions. A bold step has been taken, one that few would have thought possible just a few months ago. This is a victory for tax fairness, for social justice and for the multilateral system. But our work is not done. We have until October to finalise this agreement. I am optimistic that we will be able in that time also to reach a consensus among all European Union Member States on this crucial issue.” The work under the auspices of the Organization for Economic Co-operation and Development (OECD) Inclusive Framework focuses on two main issues:
Adapting the international rules on how the taxation
of corporate profits is shared amongst countries, to
reflect the changing nature of business models,
including the ability of companies to do business
without a physical presence. Under the new rules, a
share of the excess profits of the largest, most
profitable Multinational Enterprises (MNEs) would be
redistributed to market jurisdictions, where
consumers or users are located. Further information
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