Finance Minister Scholz: G20 support global minimum tax

“We did it,” announced Finance Minister Scholz at the G20 summit of finance ministers in Venice. According to the Vice Chancellor, after a long struggle, the states have agreed on the global minimum tax for large corporations.

According to Vice Chancellor Olaf Scholz (SPD), the large industrial and trading countries will agree to the planned global tax reform for large companies. “We have worked really hard in the past few weeks, but we made it,” said Scholz on the sidelines of a meeting of G20 finance ministers in Venice.

The planned minimum tax of 15 percent and the new distribution of taxation rights among the states should be implemented as soon as possible. “Our goal is for the agreement to come into force in 2023,” said the German finance minister. The final questions should be clarified by October this year.

Pay where business is good

131 countries had recently approved the plans under the umbrella of the industrialized nations organization OECD. Eight countries – including Ireland, Hungary and Estonia from Europe – refused to sign.

The minimum tax of 15 percent is intended to prevent companies from relocating their headquarters to low-tax countries and to prevent states from lowering their corporate taxes in competition with one another. In addition, international companies should not only pay taxes in their home countries in future, but also where they do good business. This affects, among other things, large digital corporations, which up to now often only pay little taxes overall. In addition, emerging countries should receive more tax revenue.

Yellen: “It is not essential that all countries are on board”

The planned OECD tax reform is good for all countries, said US Treasury Secretary Janet Yellen. This will result in more income and end the race to ever lower tax rates. You will continue to campaign for other countries to join the agreement. “We will try, but I should stress that it is not essential that all countries are on board.”

Scholz recently also said that if German corporations abroad, for example, only pay two percent tax on their profits there, the difference to the new minimum tax in Germany will in future be levied.