(05 July 2021) At the beginning of July 2021, 130 countries and territories joined a plan, developed in negotiations coordinated by the OECD, to reform the international taxation system and ensure that multinational enterprises pay a fair share of tax wherever they operate. The plan is expected to be implemented starting in 2023.

Key outcomes of the initiative:

  • Taxing rights on more than $100 billion of profits are expected to be reallocated annually from multinational enterprises' home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there.
  • Countries have agreed to use a new global minimum corporate income tax rate of 15% to limit competition over corporate income tax.
  • Global minimum corporate income tax is expected to generate $150 billion in additional global tax revenues annually.

Ireland and some other tax havens whose current corporate tax is lower than 15% have not signed the deal, fearing an outflow of multinational enterprises from their jurisdictions. The countries currently endorsing the plan represent more than 90% of global GDP.

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