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Schulz believes in the G-20 agreement on global minimum taxes

Schulz believes in the G-20 agreement on global minimum taxes

G20 finance ministers meeting in Venice

The planned global tax reform is likely to be implemented at the meeting of G-20 finance ministers in Venice. “Not many thought it would be anything. We are now at the finish line,” German Finance Minister Olaf Schulz told reporters on the plane Friday, shortly before arriving in the northern Italian city. The project is no longer in danger. “There are no longer any sticking points with the global minimum tax.”

Schulz had previously asserted in interviews with ARD and Deutschlandfunk that it would bring Germany substantial additional income to the tax authorities. Again the exact numbers are not mentioned.

Under the umbrella of the Organization of Industrialized Nations (OECD), 131 countries have so far agreed to a comprehensive tax reform, and eight did not initially agree with it. The plans include a global minimum corporate tax of 15 percent. In addition, large emerging economies should receive more taxes from the world’s largest and most profitable companies.

The G-20 meeting is supposed to confirm the OECD agreement last week. Consultations are scheduled for Friday and Saturday. The current draft of the final communiqué of the G20 meeting states that the OECD will be asked to clarify the final technical details and develop an implementation plan by October. Other countries are also invited to join the project.

French Finance Minister Bruno Le Maire campaigned in Venice for higher taxes. France aims to have more than 15 percent. “We have to be ambitious,” he told Bloomberg TV. Experts consider the higher rate unrealistic. Some countries have already failed to participate in the OECD negotiations – including Ireland, Hungary and Estonia, and three countries in the European Union, all of which are known for attracting low-tax global companies. In recent years, many of them have transferred part of their profits to low-tax countries and in the end often pay much lower taxes than medium-sized companies, for example. This practice will end with tax reform, and the rules must be adapted to the digital age.

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“The minimum global tax rate should be based on the 15 percent imposed by the United States of America,” said Joachim Lange of BDI. “Businesses rely on a permanent legal guarantee and the least possible bureaucracy.” Digital taxes in individual countries or in Europe are not the right way to go.