Venice - G20 decided on global tax reform

The finance ministers of the large industrial and trading countries have decided on a global tax reform with minimum taxes for large companies. The German Vice Chancellor Olaf Scholz (SPD) spoke on Saturday at the meeting with his G20 counterparts in Venice of a “great historical moment”. At the end of the ministerial debate, applause broke out.

"The G20 countries have now agreed that they want to agree a new order of international taxation," said Scholz. The reform with a minimum tax of 15 percent and a new distribution of taxation rights among states is expected to come into force in 2023. The final questions should be clarified by October this year, when the heads of state of the G20 countries should agree. Scholz said he was "completely sure" that a decision would be successful there.

At the working level, 131 countries around the world have already approved the plans. The minimum tax of 15 percent is intended to prevent companies from relocating their headquarters to low-tax countries and to prevent the states from lowering their company taxes in competition with one another. In addition, international companies should not only pay taxes in their home countries in the future, but also where they do good business. This affects, among other things, large digital corporations, which up to now have often paid very little taxes overall.

"The practice of avoiding tax payments by relocating tax payments to tax havens will end for good," said Scholz. At the same time, the states would get more funds to finance their community - and large, very profitable companies would be taxed more fairly.

The industry association BDI warned that the minimum tax rate must be based on the 15 percent brought into play by the USA. Several countries, including France and Germany, had previously indicated that they actually wanted a higher minimum rate. The BDI also warned that the G20 countries should now speak out clearly against additional national and European digital taxes that could lead to competitive disadvantages and trade conflicts.

US Treasury Secretary Janet Yellen also called for an end to European digital taxes. She hoped that the international agreement on a redistribution of taxation rights would make it possible to get rid of existing digital taxes, she said in Venice. The US is of the opinion that these taxes discriminate against American companies.