Australian Treasurer Expresses Optimism on Global Tax Talks
Australian Treasurer Jim Chalmers expressed optimism on progress made towards a long-awaited overhaul of global corporate taxation at a meeting of Group of 20 (G20) nations in India. The G20 finance ministers and central bankers are convening in India on Monday and Tuesday.
Progress and Advancement in Global Tax Reforms
Chalmers highlighted the progress made in recent years and emphasized the need to further advance in global tax reforms. The 2021 deal, agreed upon by more than 140 countries, aims to modernize outdated rules governing the taxation of multinational corporations. The current rules allow digital giants like Apple and Amazon to shift profits to low-tax jurisdictions.
Ensuring Companies Pay Taxes Where Profits Are Made
Chalmers emphasized the importance of ensuring multinational companies pay taxes in the countries where they generate profits. He stated that countries like Australia would benefit from the reforms and expressed the country’s commitment to actively participate in the process.
The Two-Pillar Deal
The first pillar of the deal focuses on reallocating taxing rights on approximately $200 billion in profits from the largest and most profitable multinationals to the countries where their sales occur. The second pillar aims to end tax rate competition between governments and establish a global minimum corporate tax rate of 15% starting from next year.
Australia remains optimistic about the outcome of the G20 discussions and the potential for significant progress in global tax reforms.