Biden wants diplomacy to agree on a global minimum tax

Biden wants diplomacy to agree on a global minimum tax

O President of the United States of America, Joe Biden, on Saturday defended the use of diplomacy as a tool to reach an agreement with other world leaders, aimed at achieving a fair tax system and at least as a measure to prevent companies from becoming profitable. Adopting a global minimum tax on companies of 15%. compliance with tax regimes.

In his official Twitter account, Biden said the agreement is “more than a simple tax settlement”, as it is an example of how “diplomacy is reshaping the global economy and providing benefits to the population”.

“Here at the G20, both leaders, allies and competitors representing 80% of the world’s GDP have made their support for a stronger global minimum tax clear. It’s more than just a tax deal: it’s diplomacy. who are reshaping our global economy and benefiting our people,” the Democrat said.

This public support for multilateralism is a stark contrast to the position of its predecessor, the former president. Donald Trump, who criticized diplomacy during his four years in the White House.

Also lauding the use of diplomacy to reach this agreement was the leader of this year’s G20, Italian Prime Minister Mario Draghi.

“It is clear that multilateralism is the best answer to all the problems we face today. In many ways, it is the only possible answer,” Draghi said in his inaugural address at the summit.

According to sources familiar with the agreement signed today, the adoption of a global minimum tax, which will be adopted by 2030, follows a path already explored by the Organization for Economic Co-operation and Development (OECD) of a system based on two pillars.

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The first establishes that the amount of companies’ residual profit – which remains after the country where the head office is located has maintained a tax corresponding to 10% of the profitability – will be distributed among the countries where the companies operate. and the second establishes a 15% minimum tax rate for companies with sales of at least 750 million euros.

On 8 October, the OECD reported that 136 countries and jurisdictions, which cover more than 90% of the GDP of the 140 countries participating in the negotiations, agreed that the first pillar figure should be 25% of the remaining profit. needed.

The summit began today with a session dedicated to the global economy and health and will end tomorrow with a press conference by Draghi, summarizing the agreements reached on issues such as taxation, pandemics, economic recovery and climate change.

About the author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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