The G20 Leaders Summit is being held in Rome. Leaders of the world’s 20 largest economies approved on Saturday a global minimum tax of 15 percent. Its purpose is to prevent large corporations from hiding their profits in tax havens. Climate vaccines and Iran were also discussed.
The leaders of the Group of Twenty – representing 80% of global GDP – agreed on the first day of the G20 summit to introduce minimum taxes for the world’s largest companies. It has been a highlight of the program along with vaccination against COVID-19 and the climate.
The minimum global tax rate is 15 percent. It will cover the largest companies in the world. The media noted that this means a big change for smaller economies, which have largely attracted multinationals thanks to the lower tax rate.
Initial agreement on this was reached by 136 countries through the Organization for Economic Co-operation and Development (OECD) in early October.
As the OECD notes, this “historic agreement” will result in more than $150 billion flowing into countries around the world from about 100 of the world’s most profitable companies. The United States, where many international companies are based, may be one of the biggest beneficiaries of the agreement.
Global Tax: What are the details of the agreement?
The agreement states that from 2023 large corporations will have to pay a tax of at least 15%, regardless of where they operate. This will make it impossible to escape to the so-called “tax havens”.
US Treasury Secretary Jeanette softens She said the landmark agreement was a “decisive moment” for the global economy and “will end the harmful race to the road in corporate taxation.”
The agreement states that companies must pay taxes where they operate, not just where they are incorporated. The aim is to ensure that there is no incentive for companies to move their profits to tax havens, and that companies stimulate the economies of the countries in which they are located.
The minimum global tax rate will be applied to companies with a global turnover of more than 20 billion euros. This threshold will be lowered to 10 billion by 2028 if the approved rules prove effective.
The issue of the new tax structure is one of the many problems facing leaders. Other matters – such as the COVID-19 pandemic, climate change and supply chains – were discussed on Saturday at Rome’s La Nuvola (Cloud) conference center in plenary and backstage sessions, Reuters reports.
Vaccines for all
According to media reports, the forum often discussed two fundamental issues of our time: inequality, and attempts were made to strengthen joint action as part of an increasingly problematic pluralism, exemplified by the absence of the leaders of China and Russia in Rome.
Country leaders also discussed COVID-19 vaccines and the need to roll them out to poor countries. A 70% vaccination target has been announced. of the world’s population against COVID-19 by mid-2022.
On the other hand Xi Jinping And Russian President Vladimir Putin – Via video link – Demand mutual recognition of SARS-CoV-2 vaccines between individual countries
Regardless of the financial issues, the main theme of the G20 summit is climate. Hosts with the Prime Minister Mario Dragon In the foreground, they are trying to negotiate a common position on the eve of the COP26 climate summit in Glasgow. Rome would like to send a strong political message to the international community.
In many ways, pluralism is the only possible solution. We must do everything in our power to overcome the differences and revive the spirit that led to the creation of this group,” the Italian Prime Minister emphasized in his opening speech.
However, the G20 is unlikely to send a “strong message” to the international community. While leaders agree to take decisive action to decarbonize economies, there is no consensus on the details of achieving climate neutrality. The EU insists on 2050, in line with the European Green Deal policy, but China has already announced the 10 year deadline.
Accordingly, the draft summit agreement did not mention a specific date for achieving climate neutrality. Unofficially, it is known that the call will mention the “broad commitment” of world leaders to limit global warming to 1.5 degrees Celsius. But no binding arrangements will be made in the text.
There were also talks about Iran and energy
Other geopolitical issues were also discussed during the first day of the summit. The leaders of the United States, France, Germany and the United Kingdom met behind the scenes at the summit to express “growing and vital concerns” about Iran’s nuclear programme.
The meeting of the leaders of the four countries aimed to crystallize a common position in the negotiations with Iran. Joe Biden, Boris JohnsonAnd Emmanuel Macron And Angela Merkel They called on the authorities in Tehran to resume negotiations.
He also met the President of the European Commission in Rome Ursuli von der Leyen with the president of Turkey Recep Tayyip Erdogan. And it occurred after the April incident, when the President of the European Commission ran out of her chair during the meeting in Ankara with the participation of Erdogan and the President of the European Council. Charles Michel.
The Italian prime minister also met the Turkish president, who in April called Recep Tayyip Erdogan a “dictator”. This began a diplomatic crisis between Rome and Ankara, which also had economic consequences. However, the dispute was settled. In the Eternal City, the two leaders held a friendly meeting, and Erdogan was scheduled to hand the book to the Italian, according to the agencies.
