Leaders attending G20 summit have endorsed the minimum tax on corporations as part of new global tax regulation in response to skyrocketing revenues of some multinational businesses.
Leaders of the world's biggest economies have endorsed a global minimum tax on corporations as part of an agreement on new international tax rules, a step toward building more fairness amid skyrocketing revenues of some multinational businesses.
The move by the Group of 20 summit in Rome was hailed by US Treasury Secretary Janet L. Yellen as benefiting American businesses and workers.
G20 finance ministers in July had already agreed on a 15 percent minimum tax.
Its formal endorsement at the summit Saturday in Rome of the world’s economic powerhouses was widely expected.
Yellen predicted in a statement that the deal on new international tax rules, with a minimum global tax, “will end the damaging race to the bottom on corporate taxation.”
The deal did fall short of US President Joe Biden's original call for a 21 percent minimum tax. Still, Biden tweeted his satisfaction.
“Here at the G20, leaders representing 80 percent of the world's GDP — allies and competitors alike — made clear their support for a strong global minimum tax,” the president said in the tweet. “This is more than just a tax deal — it's diplomacy reshaping our global economy and delivering for our people.”
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US eyes $60 billion in new revenue
The corporate tax rate rule is aimed at preventing multinational companies from stashing profits in countries where they pay few or no taxes.
White House officials say the new tax rate would create at least $60 billion in new revenue a year in the US - a stream of cash that could help partially pay for a nearly $3 trillion social services and infrastructure package that Biden is seeking.
US adoption is key because so many multinational companies are headquartered there.
But Civil 20, which represents some 560 organizations from more than 100 countries, in a network making recommendations to the G20, were restrained in praise.
The 15 percent rate is “a little more than those (rates) we'd consider fiscal paradises,” Civil 20 official Riccardo Moro told reporters.
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