Executive summary

On 18-19 November 2024, G20 Leaders met in Rio de Janeiro, Brazil, to address major global challenges and promote strong, sustainable, balanced and inclusive growth. The African Union was welcomed as a full member of the G20. The meeting concluded with the release of the Rio de Janeiro Leaders’ Declaration, which includes a brief section on international tax priorities.

The declaration describes progressive taxation as a key to achieving broader domestic social, fiscal and development objectives and expresses the intention to engage cooperatively on effective taxation of ultra-high-net-worth individuals, referencing the continuation of discussion of these issues in the G20 and encouraging the OECD/G20 Inclusive Framework to consider working on these issues as well.

The declaration also reiterates the G20 Leaders' commitment to the October 2021 statement on Pillars One and Two and to swift implementation by all interested jurisdictions. It further notes continuing constructive discussion at the United Nations on the development of a Framework Convention on International Tax Cooperation. 

In advance of the meeting, the OECD released the OECD Secretary-General's Tax Report to the G20 Leaders. This report provides an update on activities with respect to the G20's international tax agenda, including ongoing work on the BEPS 2.0 project, tax transparency and capacity-building efforts.

Detailed discussion

G20 Rio de Janeiro Leaders’ Declaration

The declaration released at the conclusion of the G20 Leaders’ Rio de Janeiro meeting includes language on priorities in the tax area, beginning with a focus on tax as tool for achieving other policy objectives:

19. We endorse the Rio de Janeiro G20 Ministerial Declaration on International Tax Cooperation.[¹] Progressive taxation is one of the key tools to reduce domestic inequalities, strengthen fiscal sustainability, foster budget consolidation, promote strong, sustainable, balanced, and inclusive growth and facilitate the achievement of the SDGs [Sustainable Development Goals]. We applaud domestic tax reforms carried out by several G20 members to tackle inequalities and promote fairer and more progressive tax systems recently and recognize that improving domestic resource mobilization is important to support the SDGs.

In this regard, the declaration highlights the G20 Leaders’ focus on the taxation of wealthy individuals:

20. With full respect to tax sovereignty, we will seek to engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed. Cooperation could involve exchanging best practices, encouraging debates around tax principles, and devising anti-avoidance mechanisms, including addressing potentially harmful tax practices. We look forward to continuing to discuss these issues in the G20 and other relevant forums, counting on the technical inputs of relevant international organizations, academia, and experts. We encourage the Inclusive Framework on BEPS (IF) to consider working on these issues in the context of effective progressive tax policies.

Finally, the declaration expresses support for the BEPS 2.0 project and the ongoing discussion in the United Nations on the development of a new instrument for international tax cooperation:

21. We welcome the progress made on the Two-Pillar Solution under the IF. We reiterate our commitment to the October 2021 Statement of the IF and to the swift implementation of the Two-Pillar Solution by all interested jurisdictions, including expeditious negotiations on the final package of Pillar One. Our international tax cooperation should be inclusive and effective and aimed at reaching broad consensus, maximizing synergies among the existing international fora, while seeking to avoid unnecessary duplication of efforts. We continue constructive discussion at the United Nations on the development of a Framework Convention on International Tax Cooperation and its protocols.

November 2024 OECD Secretary-General Report

The OECD Secretary-General's Report to the G20 Leaders provides an update on key tax developments, similar to the report to the G20 Finance Ministers for their meeting in October 2024.

Both reports describe ongoing efforts in international tax cooperation, with sections covering the same topics: the Two-Pillar International Tax Package, BEPS Update, Tax and Inequality, Tax and Mobility, Tax Transparency, Tax Administration and Tax Certainty, Tax and Development, and the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Implications

The declaration reflects the G20 Leaders’ continuing commitment to both Pillars of the BEPS 2.0 project and also highlights the G20 interest in additional tax areas, including a focus on progressive taxation and planned engagement to ensure effective taxation of the very wealthy. In addition, the declaration references the G20 participation in the ongoing discussion at the United Nations aimed at elevating the UN role in international tax cooperation efforts.

It is important for businesses to continue to monitor the international tax discussions in the OECD, the United Nations and other global and regional forums. Business also should keep updated on tax proposals and legislative developments in the jurisdictions that are relevant to their operations. Looking ahead, with global tax discussions expanding into new areas, businesses may want to consider the opportunities available to engage with policymakers and participate in this important dialogue.