G20 to change global businesses soon.

Soon members of the G20 summit will sanction a new Global Tax Reform which can change how MNCs/MNEs operate.

MNCs/MNEs are businesses that operate in multiple countries. Apple, Google, Samsung, and Toyota are some of the most well known Multi-National Corporations/Enterprises - now these companies have been essentially... playing the system.

These MNCs (not just the ones I mentioned, there are many more) usually do: they register their companies officially in countries with low tax brackets. This means that even though practically Apple's primary operations are out of California, however, the firm has on paper listed itself in Ireland. Now by listing in Ireland or any other country with lower taxes, the MNCs give taxes according to the laws of their registered country.

Sticking with the Apple example; Apple does huge business in India. However, the only tax the firm has to pay is the duty on imported products, which is minimal and is indirectly paid by the customer. Apple does not have to directly pay any of the taxes all other local businesses do. Essentially, by registering in another country, the MNCs avoid a lot of duties/taxes.

To curb this issue, the G20 (The Group of Twenty) summit is looking to start a "tax revolution". They are going to change the idea that an MNC/MNE is to only pay the tax to the country they are registered in, but they will be liable to pay tax in every country they operate in like any other local business.

This reform will generate huge tax revenues for many countries and is a god-sent policy for growing third world countries. MNCs operating in countries such as India are benefitting from the populous markets tax-free. That is soon to change as more than 130+ countries have already agreed to the new policies.

The policy will officially roll out by 2023 as all necessary changes to global tax systems will be made starting October 2021 (after the G20 summit).

Majority of the governments will gain immensely from this reform, while the MNCs will take a massive hit in their net profits starting 2023. However, this is a much-needed change that was due decades.

Overall, the ball is set rolling it is just a matter of waiting till the final verdict is passed and the "tax revolution" starts.