This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.nytimes.com/2021/07/09/business/g20-global-minimum-tax.html
The article has changed 6 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Finance Ministers Meet in Venice to Finalize Global Tax Agreement | Finance Ministers Meet in Venice to Finalize Global Tax Agreement |
| (32 minutes later) | |
| VENICE, Italy — The world’s top economic leaders are convening on Friday to hash out crucial details of what would be the largest overhaul of the international tax system in a century, kicking off a three-month race to finish a deal by the end of the year. | VENICE, Italy — The world’s top economic leaders are convening on Friday to hash out crucial details of what would be the largest overhaul of the international tax system in a century, kicking off a three-month race to finish a deal by the end of the year. |
| Gathering in this ancient hub of international commerce, finance ministers from the Group of 20 nations are pressing ahead with plans to put an end to global tax havens and force multinational corporations to pay an appropriate share of tax wherever they operate. The negotiations, which will have sweeping ramifications for the finances of global businesses, have been sputtering along for much of the last decade and are entering what officials hope to be the final stretch. | Gathering in this ancient hub of international commerce, finance ministers from the Group of 20 nations are pressing ahead with plans to put an end to global tax havens and force multinational corporations to pay an appropriate share of tax wherever they operate. The negotiations, which will have sweeping ramifications for the finances of global businesses, have been sputtering along for much of the last decade and are entering what officials hope to be the final stretch. |
| “A few big weeks and months are ahead,” Pascal Saint-Amans, director of the center for tax policy and administration at the Organization for Economic Cooperation and Development, which is overseeing the talks, said in a brief interview ahead of the summit. | “A few big weeks and months are ahead,” Pascal Saint-Amans, director of the center for tax policy and administration at the Organization for Economic Cooperation and Development, which is overseeing the talks, said in a brief interview ahead of the summit. |
| The meetings follow a breakthrough in the negotiations that came last week when 130 countries backed a conceptual framework for the new tax plan. The blueprint includes a global minimum tax of at least 15 percent that each country would adopt and new rules that would force technology giants like Amazon and Facebook and other big global businesses to pay taxes in countries where their goods or services are sold, even if they have no physical presence there. | The meetings follow a breakthrough in the negotiations that came last week when 130 countries backed a conceptual framework for the new tax plan. The blueprint includes a global minimum tax of at least 15 percent that each country would adopt and new rules that would force technology giants like Amazon and Facebook and other big global businesses to pay taxes in countries where their goods or services are sold, even if they have no physical presence there. |
| A person familiar with the negotiations said on Friday that Peru, which did not initially join the O.E.C.D. agreement, had signed on, making it 131 countries backing the blueprint. | |
| The changes to the world’s tax system would generate an additional $150 billon of global tax revenue per year, the O.E.C.D. estimates, and shift taxing rights of over $100 billion in profits to different countries. Officials hope to complete a deal by October, when the leaders of the G20 countries return to Italy for the last summit of the year. | The changes to the world’s tax system would generate an additional $150 billon of global tax revenue per year, the O.E.C.D. estimates, and shift taxing rights of over $100 billion in profits to different countries. Officials hope to complete a deal by October, when the leaders of the G20 countries return to Italy for the last summit of the year. |
| The stakes to meet that deadline are high, particularly for the United States. The agreement is intended to put an end to a cascade of digital services taxes that many countries around the world, including Britain, France and Italy, are adopting to capture more tax revenue from American technology companies. The United States has called those taxes discriminatory, and the Biden administration has approved retaliatory tariffs on wine, cheese, clothing and other products from those countries that could go into effect later this year if a deal is not reached. | The stakes to meet that deadline are high, particularly for the United States. The agreement is intended to put an end to a cascade of digital services taxes that many countries around the world, including Britain, France and Italy, are adopting to capture more tax revenue from American technology companies. The United States has called those taxes discriminatory, and the Biden administration has approved retaliatory tariffs on wine, cheese, clothing and other products from those countries that could go into effect later this year if a deal is not reached. |
| The United States wants European countries to drop their digital services taxes immediately, but policymakers have suggested that they could remain in place until a new agreement is fully enacted, which could take years. | The United States wants European countries to drop their digital services taxes immediately, but policymakers have suggested that they could remain in place until a new agreement is fully enacted, which could take years. |
| The European Union is also pressing ahead with a new digital levy even as the O.E.C.D. tax talks proceed. Treasury Secretary Janet L. Yellen is expected to urge her European Union counterparts to delay such a move when she visits Belgium next week at the conclusion of her two-country trip. | The European Union is also pressing ahead with a new digital levy even as the O.E.C.D. tax talks proceed. Treasury Secretary Janet L. Yellen is expected to urge her European Union counterparts to delay such a move when she visits Belgium next week at the conclusion of her two-country trip. |
| Other outstanding issues remain to be worked out this weekend and in the coming months, including coaxing countries with low tax rates, like Ireland, to sign on to the agreement as well as settling on the exact rate that global companies would face. | Other outstanding issues remain to be worked out this weekend and in the coming months, including coaxing countries with low tax rates, like Ireland, to sign on to the agreement as well as settling on the exact rate that global companies would face. |
| The United States and France would like the global tax to be higher than 15 percent. Bruno Le Maire, France’s finance minister, said on Friday that he would push for the minimum tax increase. | The United States and France would like the global tax to be higher than 15 percent. Bruno Le Maire, France’s finance minister, said on Friday that he would push for the minimum tax increase. |
| “This must be a groundbreaking agreement,” Mr. Le Maire told reporters in Venice. “That is why France is going to advocate for a global minimum corporate tax of higher than 15 percent, because this is the first time we can really put an end to the race to the bottom on international taxation, which is clearly a dead end for all of us.” | “This must be a groundbreaking agreement,” Mr. Le Maire told reporters in Venice. “That is why France is going to advocate for a global minimum corporate tax of higher than 15 percent, because this is the first time we can really put an end to the race to the bottom on international taxation, which is clearly a dead end for all of us.” |
| Mr. LeMaire did not specify what rate France would seek. The country has one of the highest standard corporate tax rates in Europe, at 33.5 percent, although the effective rate that companies pay is much lower. | Mr. LeMaire did not specify what rate France would seek. The country has one of the highest standard corporate tax rates in Europe, at 33.5 percent, although the effective rate that companies pay is much lower. |
| Raising the minimum tax above the Biden administration’s proposed 15 percent rate would allow the creation of “new funding for the fight against climate change,” Mr. LeMaire said. “So I’m confident that even if there are some different views among G20 member states we can reach an agreement.” He added that France would put “all our pressure, all of our impetus to get this breakthrough.” | Raising the minimum tax above the Biden administration’s proposed 15 percent rate would allow the creation of “new funding for the fight against climate change,” Mr. LeMaire said. “So I’m confident that even if there are some different views among G20 member states we can reach an agreement.” He added that France would put “all our pressure, all of our impetus to get this breakthrough.” |
| Mr. Saint-Amans said he believed that reluctant countries such as Ireland would come around to join the agreement if the United States was able to pass the reforms through Congress — something he acknowledged was not guaranteed. Republican lawmakers have expressed some skepticism about the global minimum tax, in part because they see it as a stalking horse for the Biden administration to raise the U.S. corporate tax rate. | Mr. Saint-Amans said he believed that reluctant countries such as Ireland would come around to join the agreement if the United States was able to pass the reforms through Congress — something he acknowledged was not guaranteed. Republican lawmakers have expressed some skepticism about the global minimum tax, in part because they see it as a stalking horse for the Biden administration to raise the U.S. corporate tax rate. |
| President Biden has tied his proposal to raise the corporate tax rate in the United States to 28 percent from 21 percent to a global minimum tax, saying that it would dissuade companies from simply moving operations offshore. Republicans, who cut the corporate rate from 35 percent to 21 percent rate in 2017, have said they will oppose any changes to those tax cuts. | President Biden has tied his proposal to raise the corporate tax rate in the United States to 28 percent from 21 percent to a global minimum tax, saying that it would dissuade companies from simply moving operations offshore. Republicans, who cut the corporate rate from 35 percent to 21 percent rate in 2017, have said they will oppose any changes to those tax cuts. |
| Treasury officials have expressed confidence that the global tax can pass muster in the United States. But officials have not made clear whether the White House believes it needs to gain the support of reluctant Republicans or if they can push the tax changes through Congress only with votes from Democrats. Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee, told reporters this week that he believed the Biden administration’s proposed tax overhaul would be dead on arrival in Congress. | Treasury officials have expressed confidence that the global tax can pass muster in the United States. But officials have not made clear whether the White House believes it needs to gain the support of reluctant Republicans or if they can push the tax changes through Congress only with votes from Democrats. Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee, told reporters this week that he believed the Biden administration’s proposed tax overhaul would be dead on arrival in Congress. |
| “I think first, this is an economic surrender that other countries are glad to go along with, as long as America is making itself that uncompetitive,” Mr. Brady said. “And secondly, I think there are too many competing interests here for them to finalize a deal that would be agreeable to Congress.” | “I think first, this is an economic surrender that other countries are glad to go along with, as long as America is making itself that uncompetitive,” Mr. Brady said. “And secondly, I think there are too many competing interests here for them to finalize a deal that would be agreeable to Congress.” |
| Other nations must also determine how to turn their commitments into domestic law. | Other nations must also determine how to turn their commitments into domestic law. |
| The mechanics of changing how the largest and most profitable companies are taxed and exceptions for financial services, oil and gas businesses will also be central to the discussions. There are already concerns that carve-outs could lead to new tax loopholes. | The mechanics of changing how the largest and most profitable companies are taxed and exceptions for financial services, oil and gas businesses will also be central to the discussions. There are already concerns that carve-outs could lead to new tax loopholes. |
| Tax is not the only matter on the agenda this weekend. Ms. Yellen will be working with her international counterparts on a plan to provide more aid to developing countries to combat the coronavirus pandemic and how to deploy vaccines more widely. | Tax is not the only matter on the agenda this weekend. Ms. Yellen will be working with her international counterparts on a plan to provide more aid to developing countries to combat the coronavirus pandemic and how to deploy vaccines more widely. |
| Despite a robust global economic expansion this year, the International Monetary Fund warned this week of a worsening “two-track recovery” and said that a “deepening divergence in economic fortunes” is leaving a large number of countries behind. | Despite a robust global economic expansion this year, the International Monetary Fund warned this week of a worsening “two-track recovery” and said that a “deepening divergence in economic fortunes” is leaving a large number of countries behind. |
| The finance leaders also discussed efforts to combat climate change, including France’s proposal for a global minimum price for carbon emissions. Ms. Yellen said on Friday that a range of tools should be considered for reaching net zero emissions. | The finance leaders also discussed efforts to combat climate change, including France’s proposal for a global minimum price for carbon emissions. Ms. Yellen said on Friday that a range of tools should be considered for reaching net zero emissions. |
| “It is important to recognize that there are numerous policy levers and paths that countries will take to create incentives for decarbonization,” Ms. Yellen said during a panel discussion. “Those could include regulatory measures, standards, direct public investments, public subsidies to incentivize private investments, and carbon markets.” | “It is important to recognize that there are numerous policy levers and paths that countries will take to create incentives for decarbonization,” Ms. Yellen said during a panel discussion. “Those could include regulatory measures, standards, direct public investments, public subsidies to incentivize private investments, and carbon markets.” |
| She added: “Our policies should have the common goal of giving the public and private sector the clarity, incentives, and resources to reduce emissions.” | She added: “Our policies should have the common goal of giving the public and private sector the clarity, incentives, and resources to reduce emissions.” |
| Ms. Yellen, who is making her second international trip as Treasury secretary, will be holding bilateral meetings with many of her counterparts, including officials from Saudi Arabia, Japan, Turkey and Argentina. China, which signed on to the global minimum tax framework, is not expected to send officials to the gathering of finance ministers and central bank governors, so there will be no discussions between the world’s two largest economic powers. | Ms. Yellen, who is making her second international trip as Treasury secretary, will be holding bilateral meetings with many of her counterparts, including officials from Saudi Arabia, Japan, Turkey and Argentina. China, which signed on to the global minimum tax framework, is not expected to send officials to the gathering of finance ministers and central bank governors, so there will be no discussions between the world’s two largest economic powers. |
| The forum will be another opportunity for the Biden administration to demonstrate the renewed commitment to multilateralism from the United States. | The forum will be another opportunity for the Biden administration to demonstrate the renewed commitment to multilateralism from the United States. |
| Mr. Saint-Amans expressed optimism about the trajectory of the tax negotiations, which were on life support during the final year of the Trump administration, and attributed that largely to the new diplomatic approach from the United States. | Mr. Saint-Amans expressed optimism about the trajectory of the tax negotiations, which were on life support during the final year of the Trump administration, and attributed that largely to the new diplomatic approach from the United States. |
| “It took a U.S. election, and some work at the O.E.C.D,” he said. | “It took a U.S. election, and some work at the O.E.C.D,” he said. |
| During the panel discussion on tax and climate change, Ms. Yellen’s counterparts said that they appreciated the spirit of cooperation from the United States. | During the panel discussion on tax and climate change, Ms. Yellen’s counterparts said that they appreciated the spirit of cooperation from the United States. |
| Chrystia Freeland, Canada’s deputy prime minister and finance minister, said that having the United States back at the table working to combat climate change was “welcome” and “transformative.” Mr. Le Maire thanked the Biden administration for rejoining the Paris Agreement. | Chrystia Freeland, Canada’s deputy prime minister and finance minister, said that having the United States back at the table working to combat climate change was “welcome” and “transformative.” Mr. Le Maire thanked the Biden administration for rejoining the Paris Agreement. |
| “The U.S. is back,” he said. | “The U.S. is back,” he said. |
| Liz Alderman contributed reporting from Paris. | Liz Alderman contributed reporting from Paris. |