55: What You Need To Know About The G20 & A New Global Minimum Tax Rate

07/27/21 • 25 min

The current G20 countries account for more than 80% of the world’s GDP, 75% of global trade, and 60% of the world’s population. This summer, all eyes will be on the G20 summit as they tackle issues related to the global minimum corporate tax and profit reallocation of multinational enterprises. In early June, members of the G7 reached an agreement that would establish a global minimum tax rate of at least 15% on multinational corporations. The intent of the deal is to stop the so-called “race to the bottom” in the international tax corporate world. Now, the G20 will meet and discuss these issues.

A global minimum tax rate would impact some of the world’s largest multinational corporations, and the G20 countries are set to discuss the proposed rate in July.

On today’s episode of the Taxgirl podcast, Kelly is joined by Mimi Song to comb through all the details about the upcoming G20 summit. As Chief Economist at CrossBorder Solutions, Mimi is responsible for managing client relationships and ensuring the successful completion of all work. At the original iteration, she served as Vice President, Professional Services. Following the sale to Thomson Reuters, Mimi was the Vice President at Duff & Phelps and served as the Head of Transfer Pricing at the Bank of Tokyo-Mitsubishi UFJ.

Listen to Kelly and Mimi talk about G20 countries’ conversations regarding a global minimum corporate tax:

What tax professionals will be talking about in regards to the upcoming G20 summit, and why it’s important.
How G20 nations are coming together to create a more fair tax environment.
When the G20 meets in July, they will primarily be looking at the details for the global minimum corporate tax proposed by the G7 in June.
Is there any dissent between the world’s nations about approving a global minimum tax rate?
How the concept of “tax morality” might play into the G20 conversations on the horizon.
The weight that tech giants like Facebook, Amazon, and Apple can carry in conversations about minimum tax rates.
Mimi estimates over 100 multinational corporations would be substantially affected by the proposed minimum tax rate.
A few countries, like France, have recently rolled out some controversial unilateral digital services tax, how might those digital taxes be impacted in the wake of G20 decisions?
Some multinational companies have established “headquarters” in other nations to take advantage of lower tax rates, so there may be some movement upon the establishment of a global corporate tax rate.
Mimi shares her insight about why these conversations are happening now. Have they been on the horizon for a while, or do the G20 feel like a global tax rate is particularly timely?
If the global minimum tax rate is approved by the G20 in July, how quickly would things move and change afterwards? Mimi expects some movement by April 2023, as stated in the proposal, but there will be a fair bit of complexity along the way.
Different jurisdictions are seeking different “carve-outs” and exceptions for companies; Mimi says those kinds of conversations will likely be among the most heated during the G20.
Corporate taxpayers love certainty. How should they be preparing now for any potential changes to come from a minimum tax rate?
Some companies have been making noise about how a global minimum will “cost them more,” which could lead to trickling down to consumers. Should taxpayers be worried about paying more for Netflix next year, for example?

More about Kelly Phillips Erb:

Kelly is the creator and host of the Taxgirl podcast series. Kelly is a practicing tax attorney with considerable experience and knowledge. She works with taxpayers like you every day. One of the things that she does is help folks out of tax jams, and hopefully, keep others from getting into them.

Links mentioned:

Kelly’s Website – TaxgirlConnect with Mimi -- CrossBorders Solutions

A global minimum tax rate would impact some of the world’s largest multinational corporations, and the G20 countries are set to discuss the proposed rate in July.

Listen to Kelly and Mimi talk about G20 countries’ conversations regarding a global minimum corporate tax:

What tax professionals will be talking about in regards to the upcoming G20 summit, and why it’s important.
How G20 nations are coming together to create a more fair tax environment.
When the G20 meets in July, they will primarily be looking at the details for the global minimum corporate tax proposed by the G7 in June.
Is there any dissent between the world’s nations about approving a global minimum tax rate?
How the concept of “tax morality” might play into the G20 conversations on the horizon.
The weight that tech giants like Facebook, Amazon, and Apple can carry in conversations about minimum tax rates.
Mimi estimates over 100 multinational corporations would be substantially affected by the proposed minimum tax rate.
A few countries, like France, have recently rolled out some controversial unilateral digital services tax, how might those digital taxes be impacted in the wake of G20 decisions?
Some multinational companies have established “headquarters” in other nations to take advantage of lower tax rates, so there may be some movement upon the establishment of a global corporate tax rate.
Mimi shares her insight about why these conversations are happening now. Have they been on the horizon for a while, or do the G20 feel like a global tax rate is particularly timely?
If the global minimum tax rate is approved by the G20 in July, how quickly would things move and change afterwards? Mimi expects some movement by April 2023, as stated in the proposal, but there will be a fair bit of complexity along the way.
Different jurisdictions are seeking different “carve-outs” and exceptions for companies; Mimi says those kinds of conversations will likely be among the most heated during the G20.
Corporate taxpayers love certainty. How should they be preparing now for any potential changes to come from a minimum tax rate?
Some companies have been making noise about how a global minimum will “cost them more,” which could lead to trickling down to consumers. Should taxpayers be worried about paying more for Netflix next year, for example?

More about Kelly Phillips Erb:

Links mentioned:

Kelly’s Website – TaxgirlConnect with Mimi -- CrossBorders Solutions

Previous Episode

54: Tax Basics on TikTok: How Tax Professionals Can Grow a Social Media Following

In June, Taxgirl wrote a story referencing a bad tax take on TikTok. It was a case of tax advice going viral for all the wrong reasons, and a lack of understanding of tax basics. Shortly after publishing the story, Taxgirl received a message from Duke Moore who wrote, “TikTok generally gets a bad rep for misinformation, but I, on the other hand, use the platform to educate others about taxes in a concise and entertaining manner.”

Misinformation can spread easily on social media, so tax professionals are using their viral platforms to educate users about tax basics.

On today’s episode of the Taxgirl podcast, Kelly is joined by Duke Moore to talk about using social media to share tax information in a helpful, educational, and positive way. Duke is an Enrolled Agent in Dallas, Texas, who shares his passion for helping others navigate their taxes on TikTok. His account currently has a following of 2.7 million, and is growing every day.

Listen to Kelly and Duke talk about tax basics and social media:

TikTok is one of the best ways to reach a huge audience; it’s a huge platform. While it can be great for entertainment, Duke says it’s also a great space for sharing educational tax information.
How did Duke start his TikTok platform, and how did he grow his audience so successfully? He had never thought about posting TikTok videos for his business until he heard others share how the platform helped their businesses grow.
What are the challenges that come with TikTok’s massive reach and engagement metrics?
When it comes to sensitive or technical tax information on the internet, how does Duke funnel his audience members to more secure, private space for further tax advice?
What does Duke’s content planning strategy look like? Some of his videos are spontaneous, some are videos on a trending topic, and some are answering questions his audience commonly asks.
How does Duke balance his information delivery to include a general audience, while leaving room for nuance, exceptions, and special cases? A TikTok video is only 60 seconds long!
What’s the landscape of the existing community of tax professionals on TikTok? Duke shares his experience learning and gaining more information through the platform, thanks to other professionals sharing their expertise as well.
Duke utilizes live video sessions on TikTok to help answer some more nuanced questions, and he says lives also boost community engagement overall.
What advice does Duke have for aspiring TikTok creators in the tax world? What would he have done differently knowing what he knows now? He says it’s important to be careful with your words, and to always be specific and never overgeneralize.
In regards to spreading misinformation on TikTok, how does Duke approach criticisms of his videos? Duke emphasizes the importance of speaking slowly and with intention and detail, even though a TikTok video is only 60 seconds long. He even says, “You’re supposed to have haters.”
Does Duke often experience negative pushback and racist comments as a Black man in the tax space? Does he feel pressure to be an “example” for Black men in the tax profession?
Duke says his primary goal on TikTok is to “make taxes easy to understand,” and that’s the driving force behind all his content. His audience grows because he makes the topic approachable and understandable.
What other platforms does Duke use? Twitter and YouTube can be challenging to gain an audience, but worth it in the long run.
How does Duke balance managing his tax business and create content on his TikTok platform? TikTok helps send over 100 leads a day to his business, and he does all the admin by himself.
Duke’s plans for creating free education resources for small business owners and entrepreneurs that want to learn all about taxes.
Is it a challenge to separate personal and business social media, especially with Duke’s huge TikTok following? Duke says it’s all about authenticity; he wants people to know who they’re working with, so he doesn’t worry about separating the two too much.

More about Kelly Phillips Erb:

Links mentioned:

Kelly’s Website – TaxgirlDuke Moore’s Social Media - TikTok | Instagram | Twitter

Next Episode

56: Diversity and Inclusion in Finance & How to Boost the Momentum

What did you do in 2020 to make a change for the better? Last year, companies were asked to be accountable and actionable about their diversity and inclusion efforts. The results have been mixed. As Derrick Coleman of Creative Financial Staffing has written, “Improving diversity at an organization does not happen overnight. It will take time and effort for companies to make progress and begin building a more diverse workplace.”

Young professionals and recent grads are eager to see themselves represented in a company’s leadership. Diversity and inclusion initiatives are helping to reshape representation across the accounting world.

On today’s episode of the Taxgirl podcast, Kelly is joined by Derrick Coleman to talk about how a diverse workforce is good for both the culture and the bottom line of an organization. Derrick is the Managing Director for Creative Financial Staffing of Los Angeles, where he serves as a practiced leader of GHJ’s recruiting division. CFS specializes in the placement of accounting and finance professionals into temporary and permanent positions across a broad range of industries.

Listen to Kelly and Derrick talk about companies’ diversity and inclusion efforts in a post-pandemic world:

Why is it important to have diversity in the workplace, especially in the world of tax and finance?
Research shows that a diverse workforce is more profitable at the end of the day, why don’t we see more companies making more of an effort to improve right now?
The tax and accounting fields are notoriously resistant to change. Derrick says education is key; companies need to start having open dialogues about these topics, and really listen to their staff.
As a young professional new to the workforce, there’s such an advantage to seeing yourself and your identity represented in your field. Derrick shares how companies can begin to make representation more of a priority.
When hiring, how can professionals learn to look beyond their internal biases, from sharing an alma mater with an applicant, to tackling race and gender biases?
Search engines, technology, and online recruiting software have already widened the field and can help companies cast a broader net when seeking to hire. But how can firms teach their staff to overcome their biases when it comes to interviews and offers of employment?
Derrick encourages teams to go through mandatory unconscious bias training, with an emphasis on retention just as much as recruitment. He says firms have to make the effort to mentor and develop diverse professionals on a daily basis, long after they’ve recruited them to the team.
The demographics numbers regarding who is graduating versus who is managing teams do not match up at all. In other words, it can be hard for new grads to find an influential mentor in their field that looks like them.
Diversity and inclusion commitments start with the leadership of the company, Derrick says. And it’s up to the leadership teams to keep the DEI strategy at high priority, and to assign mentors and sponsors throughout their ranks and across all demographics.
How can staff members practice being supportive allies once new diverse employees are in place, without putting the pressure onto that new staff member to educate the rest of the team?
What are Derrick’s recommended resources for companies just getting started with putting diversity and inclusion initiatives into place?
How can staff members work on speaking up on behalf of creating more diversity equity and inclusion efforts, without causing accidental harm or offense in the meantime? Derrick says that everyone will make mistakes along the way; it’s important to create a safe space and stay dedicated to your own further education into the subject.
Where does Derrick see diversity and inclusion initiatives going in the future, and how can companies keep expanding upon them for a more diverse and inclusive workplace environment?