Leaders of the G20 world's major economies approved a global minimum tax on the largest companies on Saturday, but were still haggling over the pressing issue of climate change.

In the first major announcement of the two-day G20 summit in Rome, the bloc endorsed a "historic" agreement that would see multinationals subject to a minimum 15 percent tax, said US Treasury Secretary Janet Yellen, who attended the talks.

The deal would "end the damaging race to the bottom on corporate taxation", she said in a statement.

The reform plan, already backed by almost 140 countries, seeks to end the practice of big corporates such as Apple and Google parent Alphabet of sheltering profits in low-tax countries.

But no consensus had yet emerged on a collective commitment on climate change, on the eve of the crucial COP26 conference starting in Glasgow on Sunday.

A senior US official said elements of the final G20 statement "are still being negotiated", adding that the Rome summit was about "helping build momentum" before the UN climate talks.

At a gala dinner at his lavish Qurinale palace on Saturday evening, Italian President Sergio Mattarella urged leaders to act for the sake of "future generations".

"The climate change emergency looms over everything else," the 80-year-old said, adding: "The eyes of billions of people, of entire peoples, are upon us and the results we will be able to achieve."

- Stop playing games -

Earlier in the day, thousands of climate protesters, many of them young, gathered in the city centre to demand tougher action.

"We're asking G20 leaders to stop playing games among themselves and finally listen to the people and act for the climate, as science has been asking for years," Fridays for Future activist Simone Ficicchia told AFP.

Hosts Italy are pushing the G20 to collectively endorse the UN goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, one of the aspirations of the landmark 2015 Paris climate accords.

"From the pandemic, to climate change, to fair and equitable taxation, going it alone is simply not an option," Italian Prime Minister Mario Draghi told leaders ahead of the closed-door talks.

But G20 members, many at different stages of economic development, remain at odds over the other major goal of reducing greenhouse gas emissions to net zero by 2050.

The stakes are high, as the G20 -- which includes China, the US, India, the EU and Russia -- accounts for 80 percent of global GDP and nearly 80 percent of greenhouse gas emissions.

- 'Grave' concern on Iran -

The Rome meeting was the opportunity for a flurry of bilateral meetings between G20 leaders, notably involving President Joe Biden, who is hoping to reassert US leadership following the tumultuous Trump years.

He met with his French, British and German counterparts to discuss Iran's offer to resume discussions on reviving the 2015 nuclear deal, and they expressed their "grave and growing concern" over Tehran's nuclear programme.

The deal has been floundering since Biden's predecessor Donald Trump walked out in May 2018 and imposed sweeping sanctions.

On Sunday, the US president's agenda includes bilateral talks with Turkish President Recep Tayyip Erdogan covering Syria, Libya and defence deals.

Another key topic in Rome is the coronavirus pandemic, with both Chinese President Xi Jinping and Russian leader Vladimir Putin raising the issue of the unequal global distribution of vaccines.

Putin blamed disparities on "dishonest competition, protectionism and because some states, especially those of the G20, are not ready for mutual recognition of vaccines and vaccination certificates", in his speech broadcast on Russian state television.

No new pledges are expected to address the vast gap in Covid-19 vaccine access between rich and poor countries.

But Draghi urged counterparts to "do all we can" to meet a WHO goal of vaccinating 70 percent of the global population by mid-2022.

According to a source following the summit discussions, "all the leaders" agreed to commit to that target.

What's in the global tax reform agreed by the G20?
Rome (AFP) Oct 30, 2021 - 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.

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What's in the global tax reform agreed by the G20?
Rome (AFP) Oct 30, 2021
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 wa ... read more