Financial leaders from the Group of 20 large economies said they have come to an agreement on how to move forward on a “more stable and fairer international tax architecture,” according to a communique out of the meeting Saturday.
The G-20 is a forum for the governments and central bank governors from 20 major economies. In a meeting of the group’s finance ministers and central bank governors, leaders endorsed components of a tax plan, including the reallocation of profits of multinational enterprises and a global minimum tax after “many years of discussions and building on the progress made last year,” they wrote.
The group will aim for national leaders to approve the plan at a G-20 summit in October .
According to Reuters , the pact would establish a global minimum corporate tax of at least 15% in an attempt to prevent multinationals from shopping around for the lowest tax rate. The agreement would also shift the way companies like Amazon and Alphabet’s Google are taxed, basing it partly on where they sell products and services, instead of the location of their headquarters.
Reuters reported that German Finance Minister Olaf Scholz confirmed that all G-20 economies were on board for the pact. Meanwhile, U.S. Treasury Secretary Janet Yellen said a handful of smaller countries are still opposed to it, including low-tax countries such as Ireland and Hungary, but will be encouraged to sign up by October.