Will the G20 solve the problem of tax havens?

Will the G20 Solve the Problem of Tax Havens?

The Ministry of Finance announced on the government website that on 8 October this year, representatives of the 20 countries with the largest economies in the world issued a joint statement taking action against so-called tax havens—countries that practice harmful tax competition—by approving at the Saturday summit in Venice a new corporate income tax agreement.

The public levy, set to come into effect in 2023, aims to stop large corporations from hiding profits that are lightly or not taxed at all in tax havens.

“Negotiations within the OECD forum were demanding, but we continue to work and want to jointly create a new tax reality worldwide. Poland has been fighting tax havens for years. Many of our proposals are being taken into account in the OECD and EU forums, which we are very pleased about. During the pandemic, Poland and Denmark initiated measures to prevent public funds intended to support businesses during lockdown from reaching tax havens. Now we are closing a stage of work on strengthening the international tax system within the OECD,” said the Minister of Finance, Funds and Regional Policy, Tadeusz Kościński.

This statement is the result of negotiations that have been ongoing since July this year. At that time, 130 countries, including Poland, issued a joint declaration within the Organisation for Economic Co-operation and Development (OECD) framework expressing their willingness to work on reforming international taxation and adapting international tax rules to the challenges of the digital economy.

“These rules will be based on two Pillars. Pillar I covers taxation of around the 100 largest companies that, benefiting from globalisation and digitalisation, sell goods and provide services worldwide. These include not only companies delivering digital content but also the largest enterprises selling services and goods online as well as traditionally. Pillar II, meanwhile, envisages the introduction of a minimum global tax rate of 15% effective tax rate,” explained Deputy Minister Sarnowski.

More information at: https://www.gov.pl/web/finanse/nadchodzi-wielka-reforma-miedzynarodowego-opodatkowania