A global agreement on a 15 percent minimum corporate tax has been agreed, the Organization for Economic Co-operation and Development (OECD) said, according to Reuters.
This happened after Ireland, Estonia and Hungary agreed.
The goal is to put an end to the practice of large companies evading or avoiding paying taxes. In addition, the agreement should put an end to the race between countries to attract investment and jobs, which began four decades ago, through minimal taxation.
The talks lasted four years. They received impetus from the economic crisis caused by the new coronavirus pandemic, as well as from the support of US President Joe Biden, who took office in January, according to Reuters.
136 of the 140 countries participating in the negotiations supported the agreement. Kenya, Nigeria, Pakistan and Sri Lanka have so far abstained.
According to the OECD, which plays a leading role in the negotiations, the agreement will cover 90 percent of the world economy.
“Today’s agreement will make our international tax system fairer and more efficient. It is a great victory for effective and balanced multilateralism,” said Matthias Corman, Secretary General of the OECD.
The Paris-based organization estimates that the minimum corporate tax will give countries additional revenue of about $ 150 billion a year. In addition, more than 125 billion in tax revenue will be redirected to countries where large multinational corporations actually operate.
“Today we have taken another important step towards greater tax fairness,” said German Finance Minister Olaf Scholz.
His British counterpart, Rishi Sunak, whose country alternates the G7, said the deal paves the way for “a fairer tax system where big players pay (fair taxes where they do business”).
The Swiss Ministry of Finance has asked to take into account the interests of small economies. The deadline set by the OECD for the entry into force of the new rules in 2023 cannot be met, she said in a statement.