Global minimum tax deal update backed by 145 countries
More than 145 countries have agreed to amend the 2021 global minimum corporate tax agreement, addressing concerns that U.S. rules could penalize U.S. multinationals.
The Organization for Economic Co-operation and Development said the new package maintains the 15 per cent global minimum tax framework designed to ensure large multinationals pay basic taxes wherever they operate.
The update includes simplifications and adjustments to bring US minimum tax laws into line with global standards, taking into account objections previously voiced by US President Donald Trump’s administration.
Mathias Cormann, the OECD’s head of Australia, said in a statement that the regulation “increases tax certainty, reduces complexity and protects tax bases”.
As of October, more than 65 countries had begun implementing the 2021 global tax deal, which requires them to impose a 15 percent corporate tax or impose additional taxes on multinational companies that book profits in regions with lower tax rates.
The revised agreement solidifies global support after G7 countries, including the United States, brokered a deal in June that exempted some US companies from parts of the original framework.
A broader agreement reached on Monday, following pressure from the United States to support updated regulation, helps stabilize the global agreement.
The future of the agreement was thrown into doubt last January when Trump criticized the 2021 agreement negotiated by his predecessor Joe Biden’s administration, saying it did not apply in the United States.
The Trump administration has threatened to impose retaliatory tariffs against countries that impose taxes on US companies under the 2021 agreement.
