Nearly 140 countries reach agreement on corporate minimum tax

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Nearly 140 countries reach agreement on corporate minimum tax

The deal announced on Friday calls for countries to adopt a 15% global minimum corporate tax on the largest companies operating internationally

Representative image.  Credit: iStockPhoto

Nearly 140 countries have agreed on a tentative deal that would make sweeping changes to the way large multinational corporations are taxed to deter them from hiding their profits in offshore havens where they pay little or no tax. .

The deal announced Friday calls for countries to adopt a minimum global corporate tax of 15 percent on the largest companies operating internationally. US President Joe Biden has been a driving force behind the deal as governments around the world seek to boost revenues in the wake of the Covid-19 pandemic.

The deal was announced by the Paris-based Organization for Economic Co-operation and Development, which hosted the talks.

The OECD agreement is an attempt to address the ways in which globalization and digitization have changed the global economy. Along with the global minimum tax, the agreement would allow countries to tax a portion of the profits of companies whose activities do not involve a physical presence, such as internet retailing or web advertising.

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