Coins of the euro are seen in Brussels, Belgium, Dec 28, 2018. (ZHENG HUANSONG/XINHUA)
PARIS – A major reform of the international tax system has been agreed upon, ensuring that multinational enterprises will be subject to a minimum 15 percent tax rate from 2023, the Organisation for Economic Cooperation and Development announced on Friday.
Some 136 countries and jurisdictions have agreed to the reform.
From 2023, a global minimum corporate tax rate of 15 percent will apply to companies with revenues above 750 million euros
From 2023, a global minimum corporate tax rate of 15 percent will apply to companies with revenues above 750 million euros ($870 million). It is estimated this will generate around $150 billion annually in additional global tax revenues, the OECD said.
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The deal should reallocate more than $125 billion of profits from around 100 of the world's largest and most profitable multinational companies around the globe, ensuring that these firms pay a fair share of tax wherever they operate and generate profits.
However, the OECD stressed that the agreement does not seek to eliminate tax competition, rather impose multilaterally agreed limitations on it.
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"Today's agreement will make our international tax arrangements fairer and work better," said OECD Secretary-General Mathias Cormann.
The deal is a "major victory for effective and balanced multilateralism," he added. "It is a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalized and globalized world economy."
The OECD has confirmed that its members are aiming to sign a multilateral convention in 2022 for the effective implementation of the new international corporate tax reform in 2023.