Gave the world great A step towards sweeping changes to global taxation, 130 countries and jurisdictions have agreed to create a minimum corporate tax along with rules for sharing the spoils of multinational corporations like Facebook Inc. and Google of Alphabet Inc.
After years of mistakes and setbacks, the deal negotiated in the OECD negotiations paves the way for G20 finance ministers to sign an agreement in principle at a meeting in Venice next week.
That might mean Implement rules that would reduce tax evasion from 2023 by making multinationals pay an effective rate of “at least 15%” and give smaller countries more tax revenue from foreign companies.
small group dThe Paris-based Organization for Economic Co-operation and Development said in a statement on Thursday that countries “have not yet joined” to the plan. According to the Organization for Economic Co-operation and Development (OECD), several key countries that were question marks accepted the statement, including India, China and Turkey. Technical details may leave room for more concessions to developing economies.
Thursday’s broad agreement avoids another hurdle that would have been fatal to efforts to rewrite tax rules, while giving only a brief chance to get a package deal approved by the US Congress and other national parliaments.
Solving the problem has become more urgent for the global economy after disagreements over taxing tech companies and setting a minimum rate turned into trade tensions last year. The promise of nearly $150 billion in additional revenue to governments has also helped strike a deal on the line, with most countries facing massive budget deficits in the wake of the COVID-19 pandemic.
The difficulty proponents of the deal have faced is getting developing countries to subscribe in large quantities to something the G-7 initially negotiated. The small club made up of wealthy economies, including the US, UK and France, agreed in London last month on a blueprint for two pillars of the OECD negotiations: a mechanism to share tax rights “at least 20%” of past profits. 10% margin of large multinational companies; The corporate tax is not less than 15%.
As it stands, Thursday’s OECD document made some changes to those proposals, saying the amount of profits to be reallocated should be between 20% and 30% of profits remaining above the 10% margin, which could increase profits for smaller economies.
It also stipulates that companies with revenues greater than 20,000 million euros (US$24,000 million) will be subject to the new rules on where they are taxed. In a concession to smaller economies, the Comprehensive Framework agreed to review terms after seven years and lower the threshold to €10 billion.
Smaller economies would also benefit from a lower threshold that would allow them to tax multinational corporations, under OECD terms.