German Finance Minister Olaf Scholz said that he does not expect hurdles to moving ahead with a planned global tax reform at a G20 meeting in Venice. He is running as Social Democrat chancellor candidate in Germany’s elections in September.
He said in an interview that everything will happen very quickly now. The goal is very ambitious: they want to have everything ready already so that it becomes international practice in 2023. 130 countries, representing more than 90% of global GDP, backed the biggest changes to cross-border corporate tax in more than a generation with new rules. The package goes to G20 finance ministers next to give political endorsement at a meeting in Venice. Scholz said that they are talking about a lot of additional money for Europe and for Germany. It is about billions, said Scholz, without giving exact figures.
He said that then the main thing is to make sure they end the practice of tax avoidance that has crept in over the last years and decades. They will put an end to that and the tax-cutting race will come to an end. Nine countries that did not sign the global tax overhaul backed by 130 others. Scholz said that he was convinced that in the end they will manage to get European countries to all agree on these rules together. And from his point of view, they would apply in any case. Scholz described the global minimum tax as a breakthrough and the biggest reform in decades.
The minimum corporate tax does not require countries to set their rates at the agreed floor. If a German corporation abroad paid only 2% on its profits, for example, it could be challenged in the future.
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