G20 leaders find agreement on global tax deal

Leaders have expressed “broad support” for a landmark deal to establish a 15% global minimum corporate tax that aims at deterring multinational countries from using clever accounting to elude taxes by using low-rate havens.

Leaders spoke on the proposal during the opening session Saturday of the summit, said officials from host country Italy. Following formal approval to be reflected in Sunday’s closing statement, countries would enact the minimum tax on their own. The idea is that headquarters countries would raise a company’s tax to 15% if the firm’s profits went undertaxed in another country.

In today’s digital and global economy, profits can come from intangibles such as copyrights and trademarks and can be easily shifted to countries offering near-zero taxes in hopes of attracting revenue they otherwise wouldn’t have.

A key question is whether the U.S. Congress will pass legislation to comply, since the U.S. is home to 28% of the world’s 2,000 largest multinationals.

Carbon-cutting goals

British Prime Minister Boris Johnson says he unsuccessfully pressed President Xi Jinping to increase China’s carbon-cutting goals ahead of a key United Nations climate change summit.

China released an updated version of its climate targets this week, promising to hit net-zero carbon emissions by 2060 and to have carbon dioxide emissions peak by 2030.

Johnson told reporters that he “pushed” Xi to move the peak to 2025 when the two men spoke by phone on Friday.

“I wouldn’t say he committed on that,” Johnson said as he flew to Rome for a G20 summit. On Sunday, Johnson will host world leaders, though not Xi, at the two-week climate conference in Scotland.

Johnson said Xi explained China’s heavy dependence on coal power, and Johnson replied that the U.K. had cut its own coal reliance from 40% of energy in 2008 to 1% today. Johnson said China should embrace technology to speed the transition to green energy.

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