Sunday, October 17, 2021
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Breaking: 136 Countries agreed to set a minimum of 15% corporate tax rate

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Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com
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A total of 136 countries and jurisdictions agreed Friday to adopt a 15% global minimum corporate tax rate from 2023 and let countries collect taxes from multinational enterprises that offer services within their borders even without a physical presence there.

The Organisation for Economic Co-operation and Development (OECD) said that 136 countries and jurisdictions had agreed to join an accord to impose a two-pillar global tax reform plan

Ireland, Estonia, and Hungary have agreed to raise this tax and have joined the tax pact reached by the OECD this summer, with 130 countries.

The agreement now commits 136 countries, including all members of the European Union and the G20. They account for more than 90% of world GDP, as the OECD has pointed out.

Four countries that haven’t signed the agreement yet:

  • Kenya,
  • Nigeria,
  • Pakistan,
  • Sri Lanka.

“A historic moment for global taxation,” European Commission Economic Vice President Valdis Dombrovskis said. He further stressed that the pact will stop the “downward race” between countries and that multinationals will pay a “fair” share. of taxes wherever they have activity.

For the past 20 years, tech giants like Google, Facebook, and Apple or big pharmaceuticals like Pfizer have chosen Ireland as their headquarters because so far they have only paid 12.5% ​​corporate tax. In this way, millions were saved in taxes, even if they operate worldwide.

Community partners, who are very critical of this unfair competition, are now celebrating what Brussels has described as a step towards a fairer and more stable global tax system.

Read also: Pandora Papers exposed the offshore structures of World leaders

The agreement reached includes, as was known, two fundamental parts: it sets a minimum rate of 15% on the profits of multinationals and also includes the obligation to tax where they get the profits. Now, in many cases, they transfer these profits to the countries where they are based, which makes them a tailor-made suit to pay fewer taxes.

This will make our international tax system fairer and work better,” said OECD Secretary-General Mathias Cormann, who spoke of a system that ” fits into a globalized and digitized global economy.

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