Giuseppe Fonte
STRESA, Italy (Reuters) – An agreement on a global minimum tax on multinationals will not be finalized by June as previously planned, Italian Economy Minister Giancarlo Giorgetti said ahead of the G7 financial summit starting on Friday.
Giorgetti, who is chairing the meeting as Italy holds the G7 presidency this year, said the United States, India and China have reservations about the terms of the agreement.
The tax is aimed primarily at U.S.-based digital giants, with the so-called “first tier” aimed at redistributing tax rights on about $200 billion of corporate profits to countries where the companies do business.
Speaking to reporters in Stresa in northern Italy, Giorgetti said on Thursday that the agreement would not be ratified by all countries expected to participate in the multilateral signing of the agreement next month.
“This work will not be completed, this is not good,” the minister said.
Last week Italy said it would facilitate the latest talks to prevent the plans from collapsing.
The first component would overcome a dispute in which the United States has threatened retaliatory tariffs on European countries such as Italy that have announced or adopted domestic digital taxes.
US trade authorities have threatened 25% tariffs on more than $2 billion worth of imports from Italy, Austria, Britain, France, Spain and Turkey, ranging from cosmetics to handbags.
Italy wants to reach a deal with Washington that would stop those tariffs, which are temporarily frozen until June, but keep the tariff in place, an official told Reuters on Friday.
The government wants to involve other European countries in negotiations with Washington, as Rome believes that a common approach at the EU level will be more effective, the official added.
In 2019, Italy introduced a 3% levy on online transaction revenue for digital companies with sales of at least €750 million, of which at least €5.5 million were made in Italy. In 2022, Rome received about 390 million euros ($422 million) from the tax.
Although the first component is not working, countries are implementing the second component of the global minimum tax agreement.
This part of the agreement aims to ensure that companies with revenues exceeding €750 million pay a global minimum rate of 15%, allowing governments to apply additional tax on income earned in countries with lower rates.
($1 = 0.9251 euro)