What’s in the global tax reform agreed by G20?

After years of negotiations, G20 leaders on Saturday endorsed an historic deal aimed at ending tax havens, although some developing countries complain it still falls short.

Some 136 countries representing more than 90 per cent of global GDP have signed the OECD-brokered deal to more fairly tax multinational companies and enact a minimum tax on global corporations of 15 per cent.

US Treasury Secretary Janet Yellen hailed the  "historic" green-light by leaders of the world's major economies, which was also confirmed by sources close to the G20 summit in Rome ahead of a final statement expected on Sunday.

The tax reform, first proposed in 2017 and given a boost through the support of US President Joe Biden, is due to come into effect in 2023.But this date will almost certainly slip, as each country must translate the global deal into national legislation -- with Biden facing some of the toughest domestic opposition.

"It is very likely that the implementation of the deal will be delayed," Giuliano Noci, professor of strategy at Milan's Polytechnic business school, told AFP. "The devil is in the detail -- all aspects of its implementation must be resolved and it must be approved by national parliaments.

"The first pillar of the reform, which involves taxing companies where they made their profits, not just where they are headquartered, has run into fierce opposition in the US Congress.

It targets above all internet giants such as Google parent Alphabet, Amazon, Facebook and Apple, experts in basing themselves in low-tax countries -- which allows them to pay derisory levels of tax in relation to their huge profits.

"If the US were to withdraw from the deal, it would be doomed to failure," added Noci. Noci expects Congress to give the green light, however, saying the  "attitude towards the digital giants has changed dramatically in recent years".

The OECD says a 15 percent global minimum corporate tax rate could add $150 billion annually to global tax revenues. About 100 multinationals reporting annual turnover of more than 20 billion euros will see part of their taxes redistributed to countries where they actually operate.

But this, and the 15 percent minimum tax rate, have been criticised as insufficient by many developing countries. Not least because the average global tax rate is currently a higher 22 percent, itself well below the average of 50 percent in 1985.

Argentina is pressing for a tax rate of 21 per cent, or even 25 per cent, because  "tax evasion by multinationals is on the of most toxic aspects of globalisation", according to its economy minister, Martin Guzman.