Top Finance Officials Agree on Tax Plan for International Companies

 

Top finance officials from the G7 industrialized nations agreed on Saturday to the idea of a worldwide minimum tax for international corporations.

Observers say the agreement signals coming changes to laws for taxing businesses across borders in the future. However, many details have yet to be worked out before a larger group of nations, the G20, is likely to give its support to the idea. G20 officials are expected to meet next month.

Here are some of the details that have been agreed on:

What countries will be affected¹?

The G7 agreement of having a worldwide tax rate for international corporations of at least 15 percent now faces another test. An online meeting of the Organization for Economic Cooperation and Development is planned for June 30 to July 1. The OECD is based in Paris.

In that meeting, a group of 139 countries will negotiate the idea with the aim of reaching agreement on additional details. Any agreement these nations reach will be studied by a meeting of G20 finance ministers who are meeting in July. Observers say, if the G20 countries agree to the minimum tax, then it would likely become a worldwide rule.

How does the tax work?

The idea of a worldwide minimum tax is that it gives countries the ability to tax company profits even if they are reported in countries with low tax rates. The G7 finance officials want the minimum tax to be used for individual countries. They do not appear to support using an average rate for all countries in which a business might operate.

Here is an example of how the tax might work. If a U.S. company reports a profit in the British Virgin² Islands, which has no corporate³ tax, U.S. tax officials could still tax that company's profits at a rate of 15 percent.

Details to be worked out

G7 ministers are also discussing how to tax the biggest international companies like Apple and Google. Those details have not been made final.

However, some industries, such as the mining industry, are likely to be exempt⁴ because of the way they pay governments and make profits. Also, countries such as China want to protect low-tax, special economic areas to support investment and development.

The OECD estimated in October that a worldwide minimum tax would provide $100 billion dollars in additional tax income each year for governments around the world. That is about four percent of all income tax collected around the world in one year. While that is a lot of money, it is a small amount when compared to the trillions of dollars large countries have spent because of the COVID-19 health crisis.

Words in This Story

minimum –n. the lowest number or amount that is possible or that is permitted

exempt –adj. not required to do something that others are required to do

1 affected   

adj.不自然的，假装的

参考例句：

• She showed an affected interest in our subject.她假装对我们的课题感到兴趣。
• His manners are affected.他的态度不自然。

2 virgin   

n.处女，未婚女子；adj.未经使用的；未经开发的

参考例句：

• Have you ever been to a virgin forest?你去过原始森林吗？
• There are vast expanses of virgin land in the remote regions.在边远地区有大片大片未开垦的土地。

3 corporate   

adj.共同的，全体的；公司的，企业的

参考例句：

• This is our corporate responsibility.这是我们共同的责任。
• His corporate's life will be as short as a rabbit's tail.他的公司的寿命是兔子尾巴长不了。

4 exempt   

adj.免除的；v.使免除；n.免税者，被免除义务者

参考例句：

• These goods are exempt from customs duties.这些货物免征关税。
• He is exempt from punishment about this thing.关于此事对他已免于处分。