Leaders of the Group of 20 leading industrial nations are set to sign off on the most sweeping overhaul of the international tax system in a century when they gather in Rome this weekend, ushering in a 15 percent global minimum tax and changes to how governments can impose levies on large, profitable multinational companies.
The agreement is the result of years of sputtering international negotiations that gathered pace this year when the Biden administration took office. When the pact is fully enacted, most likely by 2023, it could have significant implications for the global economy, corporate investment, and government coffers.
Some details will continue to be refined in the coming months. But tax experts and officials around the world have hailed the agreement as an achievement that will reverse decades of a “race to the bottom” in corporate taxation that has deprived nations of revenue as companies sought low-tax jurisdictions for their headquarters.
Here’s a look at how the deal will work.