11/04/2021

G-20 Formally Endorses Global Tax Plan

The plan gained considerable steam after the Biden administration negotiated a compromise

Leaders of the world's biggest economies formally endorsed a global tax plan at a Group of 20 summit in Rome last weekend to address how "consumer-facing" digital giants like Apple, Facebook, Google and Twitter are taxed in countries where they have users.

The plan was spearheaded by the Organization for Economic Cooperation and Development (OECD) and has the support of 136 countries. OECD wants to finalize the agreement soon and implement it by 2023.

The plan gained considerable steam after Biden administration officials negotiated a compromise that would set a minimum tax rate of at least 15 percent to prevent companies from relocating to low-tax havens and establish a system for sharing some of the profit imposed from taxing large multinationals based on where they operate, not where they’re headquartered.

Treasury Secretary Janet Yellen said the global tax deal "will remake the global economy into a more prosperous place for American business and workers. Rather than competing on our ability to offer lower rates, America will now compete on the skills of our people, our ideas and our capacity to innovate – which is a race we can win."

This article was provided to OSAP by ASAE's Power of A and Inroads.