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Approval Of An Agreement On Global Taxation Of Multinationals Between 130 Countries

A small group of countries, including Ireland and Hungary, very reluctant to sign the proposed agreement that was being negotiated, did not sign the declaration

Approval of an agreement on global taxation of multinationals between 130 countries. A small group of countries, including Ireland and Hungary, very reluctant to sign the proposed agreement that was being negotiated, did not sign the declaration.

A total of 130 countries reached a landmark tax reform agreement for multinationals on Thursday that includes a minimum tax on profits of “at least 15%,” the Organization for Economic Cooperation and Development (OECD) announced.

This pact is in addition to the one reached by the richest countries on the planet, the G-7, at the behest of the US, which advocates a global minimum tax for multinationals . “This is a historic agreement to reform the global tax system,” British Finance Minister Rishi Sunak said at the time, after chairing the G-7 meeting in London.

“After years of hard work and negotiations, this landmark package of measures will ensure that large multinational companies pay their fair share of taxes around the world,” OECD Secretary General Mathias Cormann was quoted as saying in a statement.

A small group of countries, including Ireland and Hungary, very reluctant to sign the proposed agreement that was being negotiated, did not sign the declaration, according to the list provided by the organization.

Ireland is a country with a very attractive taxation of corporate profits, which has served to attract investments from large technology companies and has also had disputes with the EU over tax liabilities with companies such as Apple.

G7 agreement
The joint declaration, which is based on the G-7 agreement, also foresees a “fairer” distribution of profits between the countries where the companies have their headquarters and those in which they actually carry out their activities, even without physical presence. This part is aimed in particular at the digital giants.

Although some experts downplay the pact , which lacks all the details, most countries celebrate it as a historic milestone. US Treasury Secretary Janet Yellen celebrated a “historic day for economic diplomacy,” while her German counterpart Olaf Scholz hailed “a colossal step toward greater tax justice.” For the French Minister of Economy, Bruno Le Maire , it is the “most important international tax agreement reached in the last century”.

“This two-pillar plan will be of great help to countries that need to mobilize the fiscal revenue necessary to restore their public finances and budgets, while investing in essential public services, infrastructure and measures necessary for a robust recovery. and sustainable after the crisis, “said the OECD in its statement.

The participants in the negotiations were given until October to “finalize the technical work” and prepare “a plan for its effective implementation in 2023.”

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