The world's biggest companies, like Facebook and Johnson & Johnson, face a much-higher collective tax bill. Photo Credit: Paul Faith/AFP via Getty Images

Society France28. October 2021

With This Tax Rule, Major Companies Will Pay Their Fair Share

A coalition of countries signed a plan to impose an international minimum corporate tax rate on the world’s largest companies to ensure they pay their fair share as active participants in a healthier world economy.

“This will make our international tax system fairer and work better,” says Matthias Cormann, secretary-general of the Organization for Economic Cooperation (OECD) whose headquarters are in Paris, France. “It’s a major victory for effective and balanced multilateralism. It’s a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalised and globalised world economy.”

The accord was negotiated under the OECD’s stewardship, and a total of 136 countries signed it – the United States, the United Kingdom, and every European Union member. The international tax overhaul includes a minimum corporate tax rate of 15%, meaning countries will collectively get an additional $150 billion in yearly tax revenue. They will also split a separate $125 billion in corporate tax receipts. The international rate will target companies that have annual revenues of at least $873 billion, such as Facebook and Johnson & Johnson. The deal still needs to be approved by G20 leaders and should be implemented by 2023.

Source:
Politico

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