Global tax treaty supported by 130 countries

Global tax treaty supported by 130 countries

According to the Organization for Economic Co-operation and Development, 130 countries have agreed to the global tax reform. Multinational corporations everywhere will ensure their fair share, but some countries in the European Union have refused to join.

The Organization for Economic Co-operation and Development (OECD) said in a statement that it would impose at least 15 per cent tax on global companies, including US giants Google, Amazon, Facebook and Apple, after the deal is implemented.

The Organization for Economic Co-operation and Development says the new tax system will add $ 150 billion to the national treasury worldwide by 2023.

The framework updates key elements of the centuries-old international tax system used in the globalized and digitized economy of the 21st century.

Following the approval of the Group of Seven Wealth Nations last month, the formal formal agreement and talks will now move to the Group of Twenty (G-20) Advanced and Emerging Economies meeting in Venice, Italy on July 9-10.

U.S. President Joe Biden said the latest agreement takes us to the distance of a global transaction to prevent the race to run to the bottom of corporate tax breaks.

Germany, another spokesman for tax reform, hailed the decision as a “major step towards tax justice” and France described it as “the most important tax treaty of the century”.

“130 countries around the world, including the G20, represent another phase of our mission for global tax reform,” said Rishi Sunak, British Treasury Secretary to the President of the G7.

– ‘In the interest of all’ –

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However, differences in global taxes highlight the fact that Ireland and Hungary, two EU low-tax countries, have refused to sign an agreement signed under the Organization for Economic Co-operation and Development.

Both countries are part of the European Union, including Luxembourg and Poland, which rely on low tax rates to attract multinational companies and build their economies.

Ireland, home to tech giants such as Facebook, Google and Apple, has a corporate tax rate of just 12.5 percent.

Irish Treasury Secretary Pascal Donohue has warned that Ireland will lose 20 per cent of its corporate revenue due to the new rules.

On Thursday, Donohue said Ireland still supported the deal “on a large scale” but not the minimum 15 percent tax.

“There is still a lot to be done before a comprehensive agreement can be reached,” he said, adding that Ireland would “actively” negotiate further.

Switzerland, known for its banking secrecy laws, has expressed concern that despite the “large reservations” it will support the measures and take into account the interests of “modern small states”.

An agreement on the implementation of the project will be reached in October.

Of the 139 people interviewed, nine have not yet signed.

China is closely monitoring its position on granting tax benefits to key sectors.

“It is in everyone’s interest to reach a final agreement as planned among all members of the comprehensive framework,” said OECD Secretary General Matthias Corman.

“This package should not exclude tax competition, but it does set a number of mutually agreed limits on it,” Korman said. .

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– The “best” world economy –

Tax officials have called for the minimum tax needed to prevent competition between countries over who can pay the lowest tax rates to multinational corporations.

For Biden, the global tax deal will help keep the United States competitive, as he suggested paying about $ 2 trillion in domestic corporate taxes on infrastructure and employment.

Biden, whose tax plans in Congress may be highly competitive, is “an important step in moving the global economy forward” to the best of middle-class workers and families in the United States and around the world.

He pointed out that the signatories make up more than 90 percent of the world economy.

The OECD said in a statement that the package would “provide the necessary support to governments that need to generate the necessary revenue” to revise their budgets and invest in measures to support post-Covid recovery.

At the same time, the charity Oxfam said it had lost enough tax to pay a fair share of the extra tax revenue to poor countries.

Oxfam said the deal was rich and utterly unfair.

burs-jh / lc / oho / je

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