G20 finance ministers sign off on global tax deal

Finance ministers of the G20 have signed off on a global tax reform plan.

The deal that 130 countries agreed to last week "seeks to introduce an international tax on multinational companies and sets a global minimum tax rate of 15 percent," POLITICO reported.

The purpose of the plan is to prevent multinational companies from using tax havens for their profits.

This global tax reform plan will not be finalized until the Rome G20 Summit in October, as remaining details still need to be worked out.

The G20 is an international forum that aims to address major issues that are tied to the global economy.

"This is a victory for tax fairness, for social justice and for the multilateral system," said the European commissioner for the economy, Paolo Gentiloni. "But our work is not done. We have until October to finalise this agreement. I am optimistic that we will be able in that time also to reach a consensus among all European Union Member States on this crucial issue."

There are still some European Union countries, like Hungary, that are opposed to the global tax reform plan.

One of the issues that remains unresolved is whether the global tax would "replace levies like the European Commission's planned digital tax, which the EU executive hopes will help finance the bloc's post-coronavirus recovery fund," POLITICO reported.

The U.S. wants the levy dropped, as it argues that it harms American tech companies and undermines the G20 deal, which the European Commission denies.