The G-20 Summit in early November was prolific. In a long-awaited agreement, on October 30, President Biden and other global leaders endorsed a global corporate tax rate of 15% on companies with revenues over $865 million per year.
The tax plan is designed to stop large multinational companies from transferring their operations (and shifting income) to countries that charge low or no taxes. Under another provision in the new plan, companies with annual revenue of $23 billion and profit margins higher than 10% are required to pay taxes in any country where they sell products or services.
G-20 Leaders are hoping to implement the new tax rules by 2023. Each country signing onto the deal will need to enact the provisions, which means a long road ahead.
The Organization for Economic Cooperation and Development estimates the deal could bring in $150 billion per year around the globe, if implemented.
Steel Clash Ends
The day after the historic tax deal, the United States and European Union met in Rome to discuss their longstanding clash over steel and aluminum.
The good news for US companies is that EU agreed to remove tariffs on American products such as whiskey, motorcycles, and power boats. In exchange, the US will allow countries in the EU to export limited quantities of steel and aluminum duty free, rolling back the tariffs imposed under former President Donald Trump.
The deal is also aimed at combating climate change, since steel manufacturing is a top contributor to global carbon emissions. The deal only extends to steel and aluminum produced within the EU where production methods are generally cleaner with the hope is that less “dirty” steel production will occur and pollute the industry.
The US and EU hope to iron out this deal in the next two years, and they hope to add on other countries such as China, who contribute to large amounts of carbon emissions.
Stay tuned for more information as these deals are finalized.
