IMF warns that there is a risk of a trade war if a global tax agreement is not reached.

The International Monetary Fund ((IMF)) has called on countries to agree on global rules for corporate income tax so as not to end up in conflicts between countries that make the situation worse.

Georgiyeva, president of IMF, said on Tuesday that multilateral agreements on taxes, such as the solutions proposed by the US, were the only way to ensure that highly profitable multinationals paid adequate taxes where they did business, including in low-income countries.

In a speech in preparation for online book distribution, Georgiyeva said that Covid-19 and the climate change crisis provide an opportunity for the world to rethink and repair the international tax system. Georgiyeva said IMF supports the OECD's inclusive framework for tax base erosion and profit transfer as a way to avoid tax conflicts.

"We are particularly optimistic that a global agreement on corporate income tax will be reached in 2021," Georgiyeva said. There is an urgent need to avoid the risk of falling into a chaotic tax or trade war in the future, when everyone is the loser.