Nations agree to minimum global corporate tax rate
Over 130 nations have collectively signed a global deal on corporate tax reform targeted at diminishing tax havens and seeking to earn $150m more per year in revenue from multinationals.
An international deal to ensure the world’s largest multinationals pay a minimum corporate tax rate of 15% was reached by 136 countries last night https://t.co/YBNMaegRDl— The Times (@thetimes) October 9, 2021
Part of the deal was an agreement to not impose new taxes on major tech firms, including Amazon and Google, for two years as Joe Biden’s team aims to get it ratified in America.
The agreement organised by the OECD is one of the biggest tax reforms in over 100 years. It includes a 15% global minimum corporate tax rate, in addition to new rules to ensure that multinational firms declare profits and pay higher taxes in the countries where they operate.
China, India and Brazil reluctantly agreed to the deal at the last minute, while Sri Lanka, Pakistan, Nigeria and Kenya opted out.
Unless this includes China and India it will be useless. https://t.co/jdhAKJ8TE1— John T. LoPiccolo (@jtl62) October 9, 2021
It marks a win for the OECD, which has been seeking to put measures in place to deal with corporate tax avoidance for a number of years.
UK Chancellor Rishi Sunak said the deal would "upgrade the global tax system for the modern age".
"We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business," he added.
UK Finance Minister Rishi Sunak hails deal on global corporate tax overhaul, saying big businesses will now pay a fair share from their earnings wherever they operate pic.twitter.com/1GvJRIPezu— TRT World Now (@TRTWorldNow) October 8, 2021
US Treasury Secretary Janet Yellen, who has long been a proponent of the deal, said: "As of this morning, virtually the entire global economy has decided to end the race to the bottom on corporate taxation.”
"Rather than competing on our ability to offer low corporate rates, America will now compete on the skills of our workers and our capacity to innovate, which is a race we can win."