Corporate Tax

Buenos Aires instances | Guzmán praises G7 initiative for the worldwide minimal corporate tax

Economy Minister Martín Guzmán has praised a landmark agreement by the Group of Seven Rich Nations that could help countries collect more taxes from large corporations.

The agreement reached by the G7 Treasury Ministers in London corresponds to a longstanding US call for a minimum corporate income tax rate of “at least 15%” on foreign income and paves the way for levies on multinational corporations in countries where they make money, rather than just there where they are headquartered.

In response to the news, the Argentine economy minister said the move to introduce a global minimum tax rate of 15 percent was “a positive step to attack multinational corporate tax avoidance, which is weakening nation states and threatening development.”

“We are celebrating the commitment of the G7,” said the official, but warned: “The minimum rate will probably also be the maximum rate. And 15 percent is very little.”

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, described the deal as a “historic step in terms of international taxes”.

The G7 deal is intended to modernize the centuries-old international tax regime and alleviate transatlantic tensions that threatened to escalate into a trade war under former US President Donald Trump. But the most important details have yet to be determined, other nations have to sign, and full implementation could take years.

US Treasury Secretary Janet Yellen, among finance chiefs who hailed the announcement as an unprecedented move, said a definitive agreement allowing companies to tax their profits outside of their home countries would include Amazon and Facebook.

– ZEITEN / BLÜHBERG / NA

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