International tax reform backed by 130 countries
12 Jul 2021
An historic deal for a global corporate tax rate of at least 15% has been agreed by 130 countries, the Organisation for Economic Co-operation and Development (OECD) has announced.
According to the OECD, the agreement will ensure an extra $150 billion in taxes is paid by large corporations annually.
It will also mean that $100 billion of profits will be reallocated each year to countries in which the corporations earn profits, but where they are not currently taxed.
The OECD plans to have the rules in place next year, to be implemented in 2023.
It has spent more than a decade negotiating the two-pillar package, pushing for multinational enterprises to pay tax where they operate and earn profits.
The OECD said it would add 'much-needed certainty and stability to the international tax system'.
Mathias Cormann, Secretary-General of the OECD, said: 'After years of intense work and negotiations, this historic package will ensure that large multinational companies pay their fair share of tax everywhere.
'This package does not eliminate tax competition, as it should not, but it does set multilaterally agreed limitations on it. It also accommodates the various interests across the negotiating table, including those of small economies and developing jurisdictions.'