Australian Treasurer Jim Chalmers expressed optimism on Saturday regarding the advancements made in the long-awaited global corporate taxation overhaul at a gathering of the Group of 20 (G20) nations in India.
Chalmers, speaking on ABC television, stated, “There’s been progress made over the years and we want to advance that progress further.” He referred to the recent meeting of G20 finance ministers and central bankers held on Monday and Tuesday.
Over 140 countries had originally planned to implement a 2021 agreement aimed at revamping outdated regulations for taxing multinational corporations. These regulations have become inadequate as tech giants such as Apple or Amazon have been able to channel profits into countries with lower tax rates.
However, some countries have expressed concerns about a multilateral treaty that forms a significant part of the plan, leading to speculation that the overhaul may be in jeopardy of collapsing, according to certain analysts.
Treasurer Jim Chalmers emphasised the significance of ensuring proper multinational tax arrangements during the upcoming G20 meeting, where he will be joined by outgoing Reserve Bank of Australia Governor Philip Lowe.
Chalmers stated, “Countries like ours stand to be beneficiaries and that’s why we want to be part of it.”
The first component of the two-pronged agreement aims to redistribute taxing rights for approximately $200 billion in profits from the largest and most profitable multinational corporations to the countries where their sales take place.
The second component urges governments to eliminate tax rate competition among nations in order to attract investments, proposing the establishment of a global minimum corporate tax rate of 15% starting next year.