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The interests of small innovative countries must be taken into account in international corporate tax measures, says Swiss Finance Minister Ueli Maurer, who has been attending the G20 meeting in Italy.

US Treasury Secretary Janet Yellen, (centre), arrives for a G20 meeting on Friday, the first one to be held in person since the pandemic began Copyright 2021 The Associated Press. All Rights Reserved

Tax was a key issue at the two-day meeting of finance ministers and central bankers from the group of 20 major economies, which wrapped up on Saturday. Maurer was attending as a guest of Italy, as Switzerland is not a member of the G20.

Discussed was the landmark Organisation for Economic Cooperation and Development (OECD) agreement which sets out a global corporate minimum tax, which was rubber stamped by 130 OECD countries on July 1.

G20 finance ministers welcomed the key points of the tax reform at their meeting, the Swiss Federal Department of Finance said in a statement on Saturday eveningExternal link.

The reform sets a tax rate of at least 15% and includes taxing more of the profits of the biggest multinationals in countries where the profits are earned. Switzerland has already said it would go along with the agreement, despite its reservations.

The endorsement paves the way for G20 leaders to finalise the reform at a Rome summit in October. But the OECD has to first come up with a detailed plan on how to implement the reform, a communique released by the Italian G20 presidencyExternal link on Saturday. This report will be discussed in October.

Swiss view

“Minister Ueli Mauer called for the interests of small innovative countries to be taken into account,” the statement added, reiteratingExternal link a position set out in a statement on July 1. More comments were expected at a Swiss press conference later on Saturday evening.

Fears have already been raised that a global minimum corporate tax rate could threaten Switzerland’s status as a hub for multinational company headquarters. Certain cantons could come under pressure, experts say.

There is, however, a long road ahead before a global minimum tax becomes a reality. Each of the 130 nations, including Switzerland, must translate the OECD’s two-prong plan into legislation.

The Venice meeting participants also discussed the unevenness of the global economic recovery as well as support for developing countries hard hit by the Covid 19 pandemic. A panel of experts is to prepare a report on countering future pandemics for the October meeting, the Swiss statement said.

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