AP "G20 Leaders Endorse Global Digital Tax Agreement"

[Asia Economy Reporter Yujin Cho] Leaders of the Group of Twenty (G20) endorsed a global digital tax agreement aimed at preventing tax avoidance by multinational corporations such as Google, Apple, and Facebook during the summit held in Rome, according to major foreign media including The Wall Street Journal (WSJ) on the 30th (local time).

Among the digital tax agreements led by the United States, the provision on "allocation of taxing rights to the country of revenue generation (market jurisdiction)" essentially allocates taxing rights on annual revenues of 20 billion euros (approximately 27 trillion won) and profits exceeding a 10% profit margin to the market jurisdiction.

This means that global corporations earning profits in various countries will pay taxes not only in their home countries but also in the countries where they actually provide services and generate profits.

Applicable companies must pay taxes from 2023 on 25% of the excess profits above the ordinary profit margin (10%) of their global revenues to each market jurisdiction.

Additionally, from 2023, a global minimum tax rate of 15% will be applied to multinational corporations with consolidated revenues exceeding 750 million euros. Accordingly, multinational corporations must pay at least 15% tax regardless of the country in which they operate.

Earlier, the Organisation for Economic Co-operation and Development (OECD) and the G20 Inclusive Framework (IF) finalized this agreement at the 13th plenary meeting on the 8th of this month with the support of 136 out of 140 countries.

WSJ reported that the United States is expected to be the biggest beneficiary of the implementation of this digital tax. According to experts, the increase in U.S. tax revenue due to the introduction of the digital tax is expected to be 15 times that of China.

This content was produced with the assistance of AI translation services.