Leaders of the Group of Twenty, a summit of the 19 richest countries in the world and the European Union, gave the green light this weekend in Rome for a minimum tax of 15% for multinational companies. There is also an agreement already between the United States and Europe on eliminating a number of import duties.
An agreement was reached today on a minimum tax for multinational corporations of 15%. This mainly targets big tech companies like Google, Amazon and Facebook, which are currently barely paying taxes.
The tax deal came at the instigation of the United States. They want to make shifting profits to countries with very low taxes less interesting for companies. Thus multinational corporations are encouraged to pay part of their taxes in the future in the countries where such profits are made.
“All G-20 heads of state today agreed to a historic agreement on new international tax rules, including a global minimum tax,” US Treasury Secretary Janet Allen said. The agreement will be formally approved on Sunday and will be effective from 2023.
Drop import duties
The United States and Europe also reached an agreement offering a solution to their trade dispute over import duties on European steel and aluminum. Under President Trump, the United States has imposed high import duties on both products, to which a number of European countries have responded with their own tariffs on American products such as Harley-Davidson motorcycles, Levi Strauss jeans and whiskey.
Since taking office, President Biden has been working to restore relations with Europe. But due to pressure from the US metals sector, this was easier said than done.
Not everyone was there
Most European heads of state or government are personally in Glasgow, but not all are. For example, Russian President Vladimir Putin and China Xi Jinping are watching the conference digitally from their countries. both called for Mutual recognition of each other’s vaccines. Both Russia and China have developed vaccines and want to spread them further in the world.
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