The G20 finance ministers on Saturday passed a tax reform for multinational corporations that aims to end tax havens and pave the way for a big tax bang due to take effect by 2023.
The proposal to introduce a global corporate tax rate of 15% has now been adopted by more than 130 countries.
France’s Finance Minister Bruno Le Maire described the agreement as a “victory”.
“We’re putting an end to tax optimization and the digital giants will finally pay their fair share of taxes. This is the biggest tax revolution in a century,” he added on Twitter.
His American counterpart, Janet Yellen, said the deal shows “the world is ready to end the global race to the bottom in corporate taxation”.
“The world should move fast now to close the deal,” she continued.
The German Finance Minister Olaf Scholz had said before the meeting in Venice, Italy, that it was “a historic moment”.
The G20 consists of Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, Great Britain, the USA and US the EU. Spain is also invited as a permanent guest.
Together they make up 60% of the world’s population and represent more than 80% of global gross domestic product and 75% of world trade.
On Friday, a high-level G20 independent body said the world needs to invest much more to avoid a repeat of the COVID-19 pandemic.
It warned that the next health crisis could come within a decade and recommended that governments raise finances by at least € 63 billion over the next five years.
Meanwhile, about 20 activists urged governments to remember the importance of saving the planet. Sitting amid the bridges, streets and squares of Venice, they called on world leaders to decarbonise the world economy.