A long road strewn with potential political pitfalls lies ahead for countries seeking to end a race to the bottom on international corporate tax, even though 130 of them have agreed to overhaul the way multinationals are taxed.
Nearly all 139 countries involved in talks at the Paris-based Organisation for Economic Cooperation and Development (OECD) last week backed plans for new rules on where companies’ profits are taxed, and a rate of at least 15%.
With ink barely dry on the agreement, jubilant politicians in higher-tax countries declared that what French Finance Minister Bruno Le Maire termed the “most important international tax deal in a century” had ended tax competition among governments.
G20 finance ministers are expected to endorse the deal at meetings on Friday and Saturday in Venice, adding momentum to a global initiative that in June prompted G7 ministers to back a clampdown on tax havens including the British Virgin Islands.
The new rules emerging from the OECD pact are tentatively scheduled to take effect in 2023, but for that to happen, countries must hammer out remaining details by October so tax codes can be revised next year.
via Reuters
