Nations agree to 15% minimum corporate tax rate

Nations agree to 15% minimum corporate tax rate
Chancellor Rishi Sunak and US Treasury Secretary Janet Yellen both welcomed the deal. Source: Getty Images
2 Min Read

Daily US Times: Most of the countries of the world have signed up to a historic deal to ensure big corporate companies pay a fairer share of tax.

Some 136 countries around the world agreed to enforce a corporate tax rate of at least 15%, as well a fairer system of taxing profits where they are earned.

The move comes as there are concerns that multinational companies are re-routing their profits through low tax jurisdictions to cut their bills.

But critics say a 15% rate is too low, and multinational companies will get around the rules.

UK Chancellor Rishi Sunak said the agreement would “upgrade the global tax system for the modern age”.

He said: “We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business.”

The Organisation for Economic Cooperation and Development (OECD) has led talks on a minimum rate for a decade.

It said the deal could bring in an extra $150bn of tax a year, bolstering economies as they recover from coronavirus pandemic.

Yet it also said it didn’t seek to “eliminate” tax competition between countries, only to limit it.

The floor under corporate tax will come in from 2023. Countries around the world will also have more scope to tax multinational companies operating within their borders, even if they do not have a physical presence there.

You may read: US deeply concerned over Taiwan-China tension