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G20 finance ministers and central bank governors meet as global growth decelerates

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G20 finance ministers and central bank governors meet as global growth decelerates

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Reuters

Ahead of the June 28 Group of 20 (G20) Leaders’ Summit, G20 finance ministers and central bank governors will gather today in Fukuoka, Japan, where they will discuss global trade tensions and standardised tax laws for internet giants, such as Google, Amazon and Facebook.

In light of the US’ expanding trade war with China and blossoming spat with Mexico, representatives will slightly downgrade their optimistic view of global growth for the coming year.

Present parties will also discuss implementing a standardised tax code for digital firms, an idea already explored by many EU member states. The framework, originally developed by the Organisation for Economic Cooperation and Development, seeks to establish that profits be taxed where they are generated, rather than where the company’s headquarters are located. It also looks to institute a minimum level of taxation, likely two to five percent, to discourage profit shifting to lower-tax countries.

At today’s meeting, expect European representatives, particularly from France and Germany, to push for ministers to agree to reach a final framework by next year. However, opposition from within the EU­, namely Luxembourg and Ireland, as well as from Washington could derail standardisation efforts.

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