G20 leaders reach deal to set 15% tax on multinationals’ global profits

Leaders of the world’s biggest economies formally backed an ambitious plan to overhaul the way countries tax multinational companies in a bid to stem competition for the lowest rates.

All of the leaders at a Group of 20 summit in Rome endorsed the new rules on Saturday, “including a global minimum tax that will end the damaging race to the bottom on corporate taxation,” U.S. Treasury Secretary Janet Yellen said in a statement. 

A senior U.S. administration official, traveling with President Joe Biden, earlier called the plan a historic reshaping of the rules for the global economy that will force corporations to pay their fair share of taxes. That echoed previous comments Yellen, whose support helped push forward a deal that languished during the administration of President Donald Trump.

The pact won support in principle from 136 governments in October under the auspices of the Organization for Economic Cooperation and Development. G-20 finance ministers endorsed a framework for the agreement in July.