All G20 members are in favor of introducing a global minimum tax rate of 15 percent for businesses. In this way, companies should be prevented from passing on profits. Last month, the G7 countries already agreement.
The finance ministers of the G20, a group of 19 major industrialized countries and the European Union, have been meeting since yesterday at a summit in Venice. The outgoing Minister of Finance Hoekstra is also present at the summit, even though the Netherlands as a country is not formally a member.
US Treasury Secretary Yellen said the meeting showed the world is ready to “end the global corporate tax race to the bottom and act now quickly to close the deal”. The goal is to be ready by October when the next summit takes place. The G20 is calling on other countries to also agree to the deal.
Tax haven Netherlands
A higher tax rate for companies seems unfavorable for Dutch tax revenues, because the Netherlands is internationally known as a tax haven. So voted the European Parliament in 2019 with a resolution that qualifies the Netherlands as such.
In particular, the Netherlands plays a major role in channeling money in order to avoid tax. “For example, money goes in and out of the Netherlands through letterbox companies,” said Arjan Lejour, professor of taxation at Tilburg University. The Netherlands differs in this respect from ‘traditional’ tax havens such as Bermuda, where companies do not have to pay profit tax.
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