© Reuters. Workers work to install a hoarding board near the venue of G20 Finance Ministers and Central Bank Governors meeting at Gandhinagar in Gujarat, India July 13, 2023. REUTERS/Amit Dave
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SYDNEY (Reuters) – Australian Treasurer Jim Chalmers expressed optimism on Saturday about progress on a long-awaited overhaul of global corporate taxation at a meeting of Group of 20 (G20) nations in India.
“There’s been progress made over the years and we want to advance that progress further,” Chalmers told ABC television, referring to the meeting Monday and Tuesday of G20 finance ministers and central bankers.
More than 140 countries were supposed to start implementing next year a 2021 deal overhauling decades-old rules on how governments tax multinational corporations. The rules are widely considered outdated as digital giants like Apple (NASDAQ:) or Amazon (NASDAQ:) can book profits in low-tax countries.
But several countries have concerns about a multilateral treaty underpinning a major element of the plan, and some analysts say the overhaul is at risk of collapse.
“This is a really important opportunity to make sure that we get the multinational tax arrangements right so that companies pay the tax where they make their profits,” said Chalmers, who will attend with outgoing Reserve Bank of Australia Governor Philip Lowe.
“Countries like ours stand to be beneficiaries and that’s why we want to be part of it.”
The first part of the two-pillar deal aims to reallocate taxing rights on about $200 billion in profits from the biggest and most profitable multinationals to the countries where their sales occur.
The second pillar calls on governments to end competition on tax rates between governments to attract investment, by setting a global minimum corporate tax rate of 15% from next year.
