The United States Treasury Secretary Janet Yellen said on Sunday that deterring the use of tax havens will let countries compete on economic fundamentals - instead of by offering ever-lower tax rates that deprive governments of money for infrastructure and education.
"This deal will end the race to the bottom," she said at a news conference after the end of the meeting in Venice. "Instead of asking the question: 'Who can offer the lowest tax rate?' it will allow all of our countries to compete on the basis of economic fundamentals – on the skill of our workforces, our capacity to innovate, and the strength of our legal and economic institutions," she said.
The tax proposal would also give countries the right to tax part of the profits of big global companies that earn money in their jurisdiction but have no physical presence. Examples would include online retailing and digital advertising.
Yellen spoke after finance ministers from the Group of 20 major economies endorsed a global minimum corporate tax of at least 15 percent, a measure aimed at putting a floor under tax rates and discouraging companies from using low-rate countries as tax havens.
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