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G20 should not backtrack on global tax deal, Italy says
Published by Global Banking and Finance Review
Posted on February 27, 2025
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Published by Global Banking and Finance Review
Posted on February 27, 2025
ROME (Reuters) - Italy urged that there be no backtracking on a major international taxation agreement at the G20 talks in South Africa, Economy Minister Giancarlo Giorgetti said on Thursday, adding that unilateral approaches would discourage investment.
U.S. President Donald Trump last month declared that a global corporate minimum tax deal reached in 2021 had "no force or effect" in the U.S., effectively pulling out of the landmark arrangement negotiated by Joe Biden's administration with nearly 140 countries.
"Unilateral and uncoordinated approaches would create tensions between countries and an uncertain fiscal environment that would discourage investments," Giorgetti said at the meeting of G20 finance ministers and central bankers in Cape Town, according to a statement issued by his office.
The European Union, Britain and other countries have adopted the 15% global corporate minimum tax, but the U.S. Congress never approved measures to bring Washington into compliance with it.
The U.S. has a roughly 10% global minimum tax, part of Trump's landmark 2017 tax cut package.
Countries that have adopted the 15% global minimum tax may be in a position to collect a "top-up" tax from U.S. companies paying a lower rate. Trump's administration has referred to such actions as retaliatory.
"We can certainly work to simplify the overall minimum tax to facilitate wider implementation," Giorgetti said.
Trump also ordered his trade chief to revive investigations aimed at imposing tariffs on imports from countries that levy digital service taxes on U.S. technology companies.
The digital service taxes aimed at dominant U.S. tech giantsincluding Alphabet's Google, Meta's Facebook,Apple and Amazon have been a longstandingtrade irritant for multiple U.S. administrations.
Italy applies a 3% levy on revenue from internet transactions for digital companies with sales of at least 750 million euros ($780 million).
($1 = 0.9601 euros)
(Reporting by Giuseppe Fonte, editing by Alvise Armellini and Hugh Lawson)