International countries agree to 15% Global Minimum Tax on big businesses
Hope to implement by 2023
by Pinedale Online!
October 31, 2021
A group of 136 countries have agreed to a global treaty that would tax large multinationals at a minimum rate of 15% and require companies to pay taxes in the countries where they do business. The agreement is now supported by all nations in the Organization for Economic Cooperation and Development (OECD) and the G20-Group of 20 world leaders, including President Joe Biden. Click on the links below for more on this story.
Nations agree to 15% minimum corporate tax rate
By Daniel Thomas, Business reporter, BBC News, www.bbc.com, October 8, 2021
Most of the world's nations have signed up to a historic deal to ensure big companies pay a fairer share of tax. A hundred and thirty six countries agreed to enforce a corporate tax rate of at least 15% and a fairer system of taxing profits where they are earned. It follows concern that multinational companies are re-routing their profits through low tax jurisdictions. Countries will also have more scope to tax multinational companies operating within their borders, even if they don't have a physical presence there. The move - which is expected to hit digital giants like Amazon and Facebook - will affect firms with global sales above 20 billion euros (£17bn) and profit margins above 10%. A quarter of any profits they make above the 10% threshold will be reallocated to the countries where they were earned and taxed there. The new system is meant to minimize opportunities for profit shifting, and ensure that the largest businesses pay at least some of their taxes where they do business, rather than where they choose to have their headquarters
Source: https://www.bbc.com/news/business-58847328
136 countries agree to minimum corporate tax rate after Ireland drops its opposition
By Hanna Ziady and Mark Thompson, CNN.com, October 8, 2021
A group of 136 countries have agreed to a global treaty that would tax large multinationals at a minimum rate of 15% and require companies to pay taxes in the countries where they do business. The agreement is now supported by all nations in the Organization for Economic Cooperation and Development and the G20. The countries that signed on to the international treaty represent more than 90% of global GDP. The Biden administration breathed new life into the global initiative earlier this year and secured the support of the G7 countries in June, paving the way for a preliminary deal n July. The OECD expects implementation of the agreement to begin in 2023. But the deal still requires countries to pass domestic legislation. The treaty will need to be ratified via a two-thirds majority in the US Senate, which is questionable given that it allows foreign countries to tax US companies.
Source: https://www.cnn.com/2021/10/08/business/ireland-global-tax-deal-oecd/index.html
G20 Signs Off On 15% Global Minimum Corporate Tax—Here’s How It Will Work
By Graison Dangor, Forbes Staff, www.forbes.com, Jul 11, 2021
Finance ministers of 20 of the world’s largest economies agreed to set a minimum tax rate for corporate income of 15% and to shift where some taxes are collected to fit the modern digital economy, advancing a key priority of President Biden to stop multinational corporations from shifting their profits to low-tax countries. The new tax system—expected to take effect in 2023—has been agreed to by 132 countries after meetings in July held by the G20 and the Organization for Economic Co-operation and Development. It sets an effective global minimum tax of 15% on multinationals with more than $890 million in revenue.
Source: https://www.forbes.com/sites/graisondangor/2021/07/11/g20-signs-off-on-15-global-minimum-corporate-tax-heres-how-it-will-work/?sh=57c7de2c1c7e
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