The Organization for Economic Co-operation and Development announced on Friday that it has reached A deal on global corporate tax rates.
state of play: More than 130 countries backed a 15% minimum global tax rate after years of negotiations. Smaller countries – such as Ireland, Hungary and Estonia – were against raising corporate tax rates because international businesses were attracted to places where the tax rate was lower, per annum. CNBC.
description: “The landmark deal, agreed by 136 countries and jurisdictions representing more than 90% of global GDP, would recoup more than $125 billion in profits to countries around the world from nearly 100 of the world’s largest and most profitable MNEs. : Will allot, ensure that these firms make proper payments. Wherever they operate and make profits, there is a share of the tax,” OECD said.
- The deal also sets new rules for the “digital age,” giants such as Amazon and Facebook now requiring countries to pay regardless of whether their products are sold, whether or not they are headquartered there, The New York Times. reports.
What are they saying: “Today’s agreement will make our international tax system work better and better,” said OECD Secretary-General Mathias Cormann.
- “This is a major victory for effective and balanced multilateralism. It is a far-reaching agreement that ensures that our international tax system is fit for purpose in a digital and globalized world economy. And you have to work hard. It’s a big improvement,” Corman said.
- Treasury Secretary Janet Yellen, in Statementcalled the deal “a once-in-a-generation achievement for economic diplomacy”.
What will happen next: The new deal will take effect in 2023.