One hundred and thirty-six countries, including Morocco, have agreed to impose a minimum tax of 15% on multinationals, the OECD announced on Friday, after the rallies of Ireland, Estonia and Hungary, announced Organization for Economic Co-operation and Development (OECD).
The major reform of the international tax system thus finalized will ensure the application of a minimum tax rate of 15% to multinational companies (MNEs) from 2023, specifies the organization.
And to be pleased that “the historic agreement, approved by 136 countries and jurisdictions representing more than 90% of the world GDP, will also allow to reallocate to countries around the world more than 125 billion USD in profits of approximately 100 multinational companies among largest and most profitable in the world, so that these companies pay their fair share of taxes regardless of the jurisdictions in which they operate and make a profit ”.
The OECD notes in this regard that after years of intense negotiations with the aim of adapting international tax rules to the realities of the 21st century, 136 jurisdictions (out of the 140 members of the OECD / G20 Inclusive Framework on BEPS ) have adhered to the Declaration on the Two-pillar Solution to address the fiscal challenges raised by the digitization of the economy.
This Declaration, it is stressed, updates and finalizes the political agreement concluded in July by the members of the Inclusive Framework aimed at in-depth reform of international tax rules.
With Estonia, Hungary and Ireland joining the agreement, it is now supported by all OECD countries and G20 member countries. Four countries – Kenya, Nigeria, Pakistan and Sri Lanka – have not joined the Declaration.
The two-pillar solution will be presented ahead of the G20 finance ministers meeting in Washington on October 13, and the G20 Leaders’ Summit to be held in Rome at the end of October, the organization also reports, which notes that the The goal of the global minimum tax agreement is not to end tax competition, but to set multilaterally agreed limits on it. It will enable countries to generate approximately USD 150 billion in additional revenue each year.
For the Secretary General of the OECD, Mathias Cormann, “the agreement will improve the functioning of our international tax agreements and make them more equitable. It represents a great victory to be credited to effective and balanced multilateralism. This ambitious agreement ensures that our international tax system is adapted to the realities of today’s digital and globalized economy. We must now act quickly to ensure the effective implementation of this far-reaching reform ”.
US President Joe Biden assured in a statement that “a strong global minimum tax will finally balance the playing field for workers and taxpayers.” “
The President of the European Commission Ursula von der Leyen welcomed “a big step forward to make our tax system fairer”.
And the French Minister of the Economy Bruno Le Maire referred to “a major, decisive achievement”, saying he wanted to translate it into a legal act during the French presidency of the European Union, in the 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