Published on :
An agreement was found on Friday between 136 countries representing 90% of global GDP, for the application of a minimum tax rate of 15% to multinational companies from the year 2023, announced the OECD. This agreement follows the rallying of Ireland, Estonia and Hungary. French Minister of the Economy Bruno Le Maire hailed “a major and decisive achievement”
One hundred and thirty-six countries agreed, Friday, October 8, to impose a minimum tax of 15% on multinationals, announced the OECD, after the rallies of Ireland, Estonia and Hungary.
“The major reform of the international tax system finalized today at the OECD will ensure the application of a minimum tax rate of 15% to multinational companies from 2023,” said the OECD in a statement , welcoming a “historic” agreement.
These 136 countries, which represent 90% of global GDP, will be able to generate around 150 billion euros in additional revenue thanks to this minimum tax, underlines the OECD.
Kenya, Nigeria and Sri Lanka, associated with the negotiations which included 140 countries, are not among the signatory countries. Pakistan, yet included in a previous list of signatory countries, is no longer in that of Friday.
“International tax policy is a complex thing, but the obscure language of today’s agreement masks the simplicity and magnitude of the issues,” responded US Treasury Secretary Janet Yellen, welcoming this ” accomplishment “.
“A big step forward”
“This is a big step forward to make our tax system fairer”, welcomed the President of the European Commission, Ursula von der Leyen.
>> To read on France24.com: “Global” corporate tax: why Amazon could get away with it
The French Minister of the Economy, Bruno Le Maire, for his part hailed “a major, decisive achievement” and affirmed that he wanted to translate this international agreement into a legal act during the French presidency of the European Union (EU), at first half of 2022.
We have finally reached a concrete and operational agreement on international taxation.
It is with great emotion that I see the conclusion of 4 years of intense negotiations.
This agreement is a real tax revolution for the 21st century. pic.twitter.com/vAe9KSFkHw– Bruno Le Maire (@BrunoLeMaire) October 8, 2021
An agreement on the main lines of international taxation was reached in July. This time, it was a question of defining technical parameters, but the subject of bitter negotiations between States with very varied national tax strategies.
The key lock of 15% jumped on Thursday with the rallying Thursday of Ireland and Estonia, two countries which were reluctant until then to affix their initials to the text.
For Dublin, which is home to the European headquarters of Apple, Facebook and Google, the assurance that the minimum tax rate for groups with more than 750 million euros in turnover would not exceed 15% was decisive. The July accord mentioned “at least” 15%, leaving the door open to an increase.
Hungary, the last EU country not to take the plunge, also joined the deal on Friday after securing concessions.
Budapest, which proposes a corporate tax rate of 9%, is one of the states betting on tax attractiveness and has negotiated one of the key points still under debate: the deductions that will be allowed to calculate the tax base for The multinationals.
The other big piece of the negotiation at the OECD was about the share of tax revenues that will be redistributed in countries where multinationals have activities and customers, but no head office.
This only concerns the very large groups which record more than 20 billion euros in turnover each year and display high profitability. The share of profits taxed in this context, the subject of a clever calculation, was set at 25% above a profitability level of 10%.
Reviews
If it is presented as historic by many leaders, the text remains criticized by NGOs and some economists for its lack of ambition and the inequalities it would cause.
According to the NGO Oxfam, with a tax rate of 15%, the additional tax revenues generated will benefit two-thirds of the rich G7 countries and the EU. The poorest countries will recover less than 3%.
As for the redistribution of tax revenues to the states where the activity of multinationals is carried out, “the United States and Europe will essentially benefit from it,” Daniel Bunn, head of international projects at the Tax Foundation, told AFP. in Washington. Because multinationals “house their head offices and most of their customers there.”
Welcoming “a great gesture forward” which allows “to remove certain flaws”, the Nobel laureate in economics Joseph Stiglitz also regretted Thursday an agreement which “does not sufficiently address the concerns of developing countries and emerging countries” . The economist campaigned for a minimum tax of 25%.
The objective is for the reform to be implemented by 2023, the time to adapt the legislation. But some questions remain unanswered, such as the ability of the US administration to force reform on Congress.
With AFP
https://wakelet.com/wake/puUmm2MlzYjh8rUw4pzlP
https://wakelet.com/wake/fayGeitTYdgPKZFyM8vNa
https://wakelet.com/wake/Rc6nekY9S2ihemgGya6xJ
https://wakelet.com/wake/8lBxsQ3qiXb-JwHEWD6qE
https://wakelet.com/wake/fVyzjAVI8w2zkRBP-cfh0
https://wakelet.com/wake/jdrda8bjh5hpfwbSxSVVP
https://wakelet.com/wake/0gupIQY5Y2I-PG1qlerHI
https://wakelet.com/wake/GPbwOOje2AwK7r0TOg60G
https://wakelet.com/wake/vczzLA0jkQgNu9cyCaCBb
https://wakelet.com/wake/y29lVhhw9wU_ENTPV2bOW
https://wakelet.com/wake/FFy7OgdL54jwzQSvQ2296
https://wakelet.com/wake/eHDYZzs6olfOLTp0Pi-JE
https://wakelet.com/wake/fevSf_gSyyNKYdzemg9f2
https://wakelet.com/wake/reBEgQIdwlDL1Iroj8iBW
https://wakelet.com/wake/trEz8VvX93ek0VHZyGa3X
https://wakelet.com/wake/ctCm3vZuiRy8Ep1AazE55
https://wakelet.com/wake/hLSnR2N0_vjxCA3bTDjb3
https://wakelet.com/wake/nqdOGlaTcx4FHNX-UdSIS
https://wakelet.com/wake/8SWPpncxChYk-1ysp36pr
https://wakelet.com/wake/cWT-_87K9abMkLBLvWKu1
https://wakelet.com/wake/koW_S7IvNSdnvRfPtXolg
https://wakelet.com/wake/NBC1aF59LuAqsJqMLlAWi
https://wakelet.com/wake/B5fNWZmH3kho4eitRhy0c
https://wakelet.com/wake/ITeqrZ5uLLIPcUiT84-cY
https://wakelet.com/wake/uJBQ-EJxTSmLG_NadFpnU