Leaders at the Group of 20 summit in Rome are expressing broad support for sweeping changes in how big global companies are taxed.
The goal: deterring multinationals from stashing profits in countries where they pay little or no taxes -- commonly known as tax havens.
Treasury Secretary Janet Yellen says it will end a decadeslong "race to the bottom" that has seen corporate tax rates fall as tax havens sought to attract businesses that used clever accounting to take advantage of low rates in countries where they had little real activity.In today's economy, multinationals can earn big profits from things like trademarks and intellectual property that are easier than factories to move.
That would make it pointless for a company to use tax havens, since taxes avoided in the haven would be collected at home.The plan would also let countries tax part of the earnings of the 100 or so biggest multinationals when they do business in places where they have no physical presence, such as through internet retailing or advertising. The tax would only apply to a portion of profits above a profit margin of 10%.
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