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 percent 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 percent.

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".

- $150 billion -

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 percent, or even 25 percent, because "tax evasion by multinationals is on the of most toxic aspects of globalisation", according to its economy minister, Martin Guzman.

Argentina eventually joined the agreement, but Kenya, Nigeria, Sri Lanka and Pakistan are still holding out.

"The agreement was negotiated with developing countries and reflects a large part of what they wanted, but it is true that it is a compromise," Pascal Saint-Amans, the head of tax policy at the OECD and one of the architects of the reform, told AFP.

Under the final version of the reform, smaller countries will benefit from a portion of the redistributed tax of companies with an annual turnover of 250,000 euros a year. For richer countries, the threshold is one million euros.

- Benefit rich countries -

However, the Independent Commission for the Reform of International Corporate Taxation (ICRICT), which comprises renowned economists such as Joseph Stiglitz and Thomas Piketty, has been scathing.

In an open letter to G20 leaders earlier this month, they said the reforms had "been watered down in such a way that it will overwhelmingly benefit rich countries".

Negotiators "made concessions to sign up three tax havens like Ireland, Estonia and Hungary, but they didn't listen to developing countries", the head of the commission's secretariat, Tommaso Faccio, told AFP.

Ireland gave up its very low corporation tax rate of 12.5 percent in return for the assurance that the future global minimum would remain stuck at 15 percent.

Previously there was talk of the rate being "at least 15 percent".

The last-minute signatures of these three low-tax European states allowed the OECD to agree the reform just in time for the Rome G20 summit.

Their support is crucial, as France wants to take advantage of its rotating presidency of the European Union from January to adopt the minimum tax rate by a European directive, which will require unanimity.

What did the G20 summit agree?
Rome (AFP) Oct 31, 2021 - Meeting in person for the first time in two years, G20 leaders had a full agenda including climate change, the Covid pandemic, a landmark tax deal and global economy worries.

Here is a summary of what they agreed.

- Climate change -

Leaders committed to the key Paris Agreement goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, pledged action against dirty coal plants, but fell short on a target of zero emissions.

"Keeping 1.5 degrees within reach will require meaningful and effective actions and commitment by all countries, taking into account different approaches," the G20 said in their final communique.

They also pledged to reach a target of net zero carbon emissions "by or around mid-century", instead of setting a clear 2050 date, as campaigners and summit host Italy were hoping for.

Elsewhere in the statement, they agreed to stop funding new dirty coal plants abroad by the end of 2021, and reaffirmed the so far unmet commitment to mobilise $100 billion for developing countries for climate adaptation costs.

Leaders for the first time acknowledged "the use of carbon pricing mechanisms and incentives" as a possible tool against climate change, just as the International Monetary Fund (IMF) is calling on the most polluting countries to go down that path by setting a minimum carbon price.

- Taxation -

Leaders put their seal of approval on an agreement that will subject multinationals to a minimum 15 percent tax, as part of an effort to build "a more stable and fairer international tax system".

US internet giants such as Amazon, Google parent Alphabet, Facebook and Apple -- which have benefited from basing themselves in low-tax countries to minimise their tax bills -- are particular targets of the new global regulation.

The reform, brokered by the OECD and backed by some 136 countries representing more than 90 percent of world GDP, has long been in the making, and is supposed to come into effect in 2023, but the deadline is at risk of slipping.

Each country taking part in the global deal must first pass national legislation -- and US President Joe Biden is among those facing tough domestic opposition to the plan.

Nevertheless, the G20 calls on relevant working groups within the OECD and G20 "to swiftly develop the model rules and multilateral instruments... with a view to ensure that the new rules will come into effect at global level in 2023."

- Vaccines -

Leaders vowed to support the WHO's goal of vaccinating at least 40 percent of the world's population by 2021 and 70 percent by the middle of next year, by boosting the supply of vaccines in developing countries and removing supply and financing constraints.

They also promised to "work together towards the recognition of Covid-19 vaccines deemed safe and efficacious by the WHO," following a complaint during summit talks by Russian President Vladimir Putin about lack of international approval for Moscow's Sputnik V jab.

- Global economy -

Meeting as rising inflation, pushed by spiking energy prices, and supply chain bottlenecks are weighing on a world economy still reeling from Covid-related disruptions, G20 leaders ruled out a hasty removal of national stimulus measures.

"We will continue to sustain the recovery, avoiding any premature withdrawal of support measures, while preserving financial stability and long-term fiscal sustainability and safeguarding against downside risks and negative spillovers," they said.

Regarding inflation, they said "central banks are monitoring current price dynamics closely" and "will act as needed to meet their mandates, including price stability, while looking through inflation pressures where they are transitory and remaining committed to clear communication of policy stances."

Finally, G20 leaders pledged to "remain vigilant to the global challenges that are impacting on our economies, such as disruptions in supply chains, (and) monitor and address these issues as our economies recover."

- Development aid -

Leaders set a new target of channelling $100 billion towards poorest nations, coming from the $650 billion pot made available by the International Monetary Fund (IMF) via a fresh issuance of its Special Drawing Rights (SDR).

SDRs are not a currency, but can be used by developing countries either as a reserve currency that stabilises the value of their domestic currency, or converted into stronger currencies to finance investments.

For poorer countries, the interest is also to obtain hard currencies without having to pay substantial interest rates.

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