G-20 hoping to agree on minimum corporate tax rate in July

The Group of 20 (G20) countries anticipate reaching an agreement on international tax issues, including a global minimum corporate tax rate, by July, Italian Finance Minister Daniele Franco said Wednesday. 

“What we see this year is an acceleration in the process,” Franco said at a press conference following a virtual meeting of G20 finance ministers and central bank governors. “The G20 is expecting to reach an agreement by July.”

Multilateral discussions about international tax issues have been underway for several years, with the G20 setting a goal for an agreement by the middle of this year. The discussions have received heightened attention in recent weeks because Treasury Secretary Janet Yellen has been pressing for a global minimum corporate tax rate as a way to end a “race to the bottom” on corporate taxation.

Franco said that Yellen’s comments are “consistent” with the G20’s work on international taxation.

The Biden administration last week released a $2.25 trillion infrastructure plan that would be paid for through corporate tax increases.

The proposal calls for the U.S. to increase its minimum tax on corporations’ foreign earnings to 21 percent. It also proposes to encourage other countries to adopt minimum corporate taxes by disallowing deductions to foreign corporations for certain payments if the companies are based in countries without strong minimum taxes.