More Than 130 Countries Reach Deal on Corporate Minimum Tax




The agreement among 136 countries representing 90% of the global economy was announced by the Paris-based Organisation for Economic Co-operation and Development, which hosted the talks that led to it. The OECD said that the minimum tax would reap some $150 billion for governments.




Big U.S. tech companies such as Google and Amazon have supported the OECD negotiations. One reason is that countries would agree to withdraw individual digital services taxes they have imposed on the companies in return for the right to tax part of their earnings under the global scheme.


“This accord opens the way to a true tax revolution for the 21st century,” said French Finance Minister Bruno Le Maire. “Finally, the digital giants will pay their just share in taxes in the countries — including France — where they produce.” 

On Thursday, Ireland announced that it would join the agreement, ditching a low-tax policy that has led companies such as Google and Facebook to base their European operations there. 

Although the Irish agreement was a step forward for the deal, developing countries have raised objections, and Nigeria, Kenya, Pakistan and Sri Lanka have indicated they will not sign up.

Anti-poverty and tax fairness advocates have said the bulk of new revenue would go to wealthier countries and offer less to developing countries that are more dependent on corporate taxes. The Group of 24 developing countries said that without a bigger share of revenue from reallocated profits, the deal would be “suboptimal” and “not sustainable even in the short run.” 

The deal will be taken up by the Group of 20 finance ministers next week and then by G-20 leaders for final approval at a summit in Rome at the end of October.


The second part of the deal, the global minimum of at least 15%, would apply to companies with more than 750 million euros ($864 million) in revenue and be passed into domestic law by countries according to model rules developed at the OECD. A top-up provision would mean tax avoided overseas would have to be paid at home. So long as at least the major headquarters countries implement the minimum tax, the deal would have most of its desired effect. 


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