G20 officials said on Saturday that the world's leading economies should show unity in dealing with aggressive "tax optimization" by global digital giants such as Google, Amazon and Facebook.
One of the biggest topics discussed by financial leaders of the G20, the 20 largest economies in the world, during their talks in Riyadh this weekend is the taxation of digital companies and the impact of the coronavirus outbreak on the global economy.
The Organization for Economic Cooperation and Development (OECD) is working to develop global rules, making digital companies pay taxes where they operate, rather than where they register their subsidiaries. This, OECD says, could boost national tax revenue by a total of $ 100 billion a year.
The cry out for optimizing taxes was mainly aimed at the United States, as it is home to the largest technology companies, in an attempt to avoid any stalling until the U.S. presidential elections conclude.
on the sidelines of a meeting of G20 finance ministers and central bankers, German Finance Minister Olaf Scholz told a tax seminar that there is no time to wait for the US elections.
“This needs leadership in certain countries,” Scholz said, while looking directly at U.S. Treasury Secretary Steven Mnuchin.
“A coordinated answer is not the better way forward, but, given the alternatives, the only way forward,” OECD head Angel Gurria stressed.
The OECD aims to set the minimum effective level of taxes on tech firms and seek agreement by the beginning of July, with the G20 ratification by the end of the year.
A draft G20 communique showed financial leaders will endorse the OECD approach to the issue in their final statement on Sunday, backing the need pay tax where business is conducted and the need for a minimum rate.
The draft G20 statement showed that financial leaders will endorse the OECD approach to this issue in their final statement on Sunday, setting a minimum amount of taxes on tech giants to reach a consensus by end of 2020.
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