136 Countries Agree To Establish 15% Minimum Corporate Tax Rate, goodbye to ‘tax heavens’

PARIS, October 11, 2021, (Reuters) – A global deal to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been agreed by 136 nations, the Organisation for Economic Cooperation and Development said on Friday.

The OECD said four countries – Kenya, Nigeria, Pakistan and Sri Lanka – had not joined the agreement.

“Today’s agreement will make our international tax arrangements fairer and work better,” OECD Secretary-General Mathias Cormann said in a statement. “This is a major victory for effective and balanced multilateralism.”

The OECD said that the minimum rate would see countries collect around $150 billion in new revenues annually while taxing rights on more than $125 billion of profit would be shifted to countries where big multinationals earn their income.

Negotiations have been going on for four years, with the deal finally agreed when Ireland, Estonia and Hungary dropped their opposition and signed up.

The deal aims to stop large firms booking profits in low-tax countries such as Ireland regardless of where their clients are, an issue that has become ever more pressing with the growth of ‘Big Tech’ giants that can easily do business across borders.

“Establishing, for the first time in history, a strong global minimum tax will finally even the playing field for American workers and taxpayers, along with the rest of the world,” Biden said in a statement.

Source: Reuters