G20 leaders agreed this Saturday in Rome to adopt a global minimum corporate tax of at least 15% as a measure to achieve a fairer tax system and prevent companies from benefiting from compliant tax regimes and not paying taxes in the countries in which they operate, sources familiar with the sessions, which are held behind closed doors, reported this Saturday.
According to sources, the leaders reached this historic agreement after four years of intense debate, a system that will be based on two pillars and that will address the fiscal challenges posed by the digitization and globalization of the economy.
The mechanism, to be adopted by 2030, follows the path already outlined by the Organization for Economic Cooperation and Development (OECD) of a system based on two pillars.
System based on two pillars
The first establishes that the volume of the residual profit of the companies (the one that remains after the country where the headquarters is located has kept the tax corresponding to 10% of the profitability) will be distributed among the countries where the companies operate, and the second establishes a minimum corporate rate of 15% for companies that have a turnover of at least 750 million euros, as stated by EFE .
On October 8, the OECD reported that 136 countries and jurisdictions, which cover more than 90% of world GDP out of the 140 that participate in the negotiations, agreed that for the first pillar the figure is 25% of that residual profit , after until now it was being discussed between a range between 20 and 30%.
This refers to large companies with a worldwide turnover of more than 20,000 million euros and a profitability of more than 10%, and the distribution of profits would be made between countries where each company has revenues of more than one million euros (250,000 euros in small state).
Sources noted that the agreement ensures fair, modern and efficient tax rules, which are also essential to encourage investment and growth.
They said that the first pillar agreement includes a commitment to eliminate taxes on existing digital services and other similar unilateral measures, as well as to refrain from introducing new taxes of the same type in the future, once the new rules are in effect.
Pact with the United States
In this sense, Italy, Austria, France, the United Kingdom and Spain have agreed to a pact with the United States on the transition of taxes on existing digital services to the new international standards.
The United States, for its part, has committed to ending the trade sanctions adopted by the United States Trade Representative (USTR) against these countries.
In the first session, the leaders also discussed the approval of the new issuance of special drawing rights by the IMF and the innovative mechanism for its reallocation.
The summit began this Saturday with a session dedicated to the global economy and health, and will conclude tomorrow with a press conference by Italian Prime Minister Mario Draghi, which will summarize the agreements reached on issues such as taxation, pandemic, economic recovery and climate change. .
The summit is attended by the President of the United States, Joe Biden; that of France, Emmanuel Macron; that of Argentina, Alberto Fernández, and that of Brazil, Jair Bolsonaro, among other heads of state, as well as the President of the Spanish Government, Pedro Sánchez, as a permanent guest.