A total of 130 countries have agreed to a global tax reform ensuring standardized rules for multinationals wherever they operate, the Organisation for Economic Co-operation and Development (OECD) said on Thursday, although some EU states did not sign up.
The OECD said in a statement that global companies, including US behemoths Google, Amazon.com Inc, Facebook Inc and Apple Inc would be taxed at least 15 percent once the deal is implemented.
The new tax regime would add about US$150 billion to government coffers globally once it comes into force, which the OECD said it hoped would be in 2023.
Photo: AP
“The framework updates key elements of the century-old international tax system, which is no longer fit for purpose in a globalized and digitalized 21st century economy,” the OECD said.
The formal agreement follows an endorsement last month by the G7, and negotiations now move to a meeting of the G20 in Venice, Italy, on Friday and Saturday next week.
US President Joe Biden said that the latest deal “puts us in striking distance of full global agreement to halt the race to the bottom for corporate taxes.”
Germany, another backer of the tax reform, hailed it as a “colossal step towards tax justice,” while France said it was “the most important tax agreement in a century.”
British Chancellor of the Exchequer Rishi Sunak, whose country holds the G7 presidency, said “the fact that 130 countries across the world, including all of the G20, are now on board, marks a further step in our mission to reform global tax.”
However, Ireland and Hungary declined to sign up to the agreement reached in the OECD framework, the organization said.
Both countries are part of a group of EU nations also including Luxembourg and Poland that have relied on low tax rates to attract multinationals and build their economies.
Ireland, the EU home to tech giants Facebook, Google and Apple, has a corporate tax rate of 12.5 percent.
Irish Minister of Finance Paschal Donohoe has warned that the new rules could see Ireland lose 20 percent of its corporate revenue.
On Thursday, Donohoe said that Ireland still “broadly supports” the deal, but not the 15 percent tax floor.
“There is much to finalize before a comprehensive agreement is reached,” he said, adding that Ireland would “constructively engage” in further discussions.
Also expressing concerns is Switzerland, which said that it would support the measures despite “major reservations” and that it hoped the interests of “small, innovative countries” be taken into account.
An agreement for the implementation of the plan is planned for October.
Nine of the 139 participants in the talks have so far not signed on to the agreement.
China, whose position was being closely watched, as it offers tax incentives to key sectors, endorsed the agreement.
“It is in everyone’s interest that we reach a final agreement among all Inclusive Framework Members as scheduled later this year,” OECD Secretary-General Mathias Cormann said.
“This package does not eliminate tax competition, as it should not, but it does set multilaterally agreed limitations on it,” Cormann said, adding that “it also accommodates the various interests across the negotiating table, including those of small economies and developing jurisdictions.”
Ministers of finance have characterized a minimum tax as necessary to stem competition between countries over who can offer multinationals the lowest rate.
For Biden, a global tax agreement would help maintain US competitiveness, as he has proposed hiking domestic corporate taxes to pay for an infrastructure and jobs program with a price tag of about US$2 trillion.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS