FILE PHOTO: Federal Finance Minister Olaf Scholz will take part in a joint press conference with Justice Minister Christine Lambrecht in Berlin on October 7, 2020. REUTERS / Hannibal Hanschke
BERLIN (Reuters) – More than 130 countries have agreed on a draft to introduce global rules on corporate taxation, which is to be discussed by the G20 finance ministers next week, said Federal Finance Minister Olaf Scholz on Friday.
“With a unanimous agreement on a draft reform of global corporate tax legislation, we have made a big step forward,” said Scholz in a statement. “This is a positive signal and I am sure that we can reach a final agreement on this reform plan by next summer.”
The Organization for Economic Co-operation and Development (OECD) has developed rules that require digital companies to pay taxes when doing business instead of registering subsidiaries. According to estimates by the OECD, this could increase national tax revenues by a total of 100 billion US dollars per year.
However, a recession triggered by the coronavirus in many industrialized nations has challenged the OECD’s goal of reaching an agreement between more than 130 countries this year.
Scholz said the main goal of any deal is to make sure that digital giants like Google TogetL.O, Amazon AMZN.O and Facebook FB.O were forced to pay their fair share of taxes.
Reporting by Christian Kraemer; Letter from Joseph Nasr; Adaptation by Thomas Escritt