The historic agreement on the introduction of a minimum tax rate for multinationals was adopted this Friday by 136 countries. Portugal was one of the nations to join the OECD-sponsored agreement that tax giants more equitably wherever they work or make a profit.
“After years of tense negotiations on the transition of the international tax system to the 21st century, 136 jurisdictions have joined“- said the OECD in a statement, stressing that the agreement” renews and completes “the principle of the political agreement reached in July,” on the fundamental reform of international tax rules. “
Of the 140 OECD countries, only four have not joined the agreement: Kenya, Nigeria, Pakistan and Sri Lanka. However, the OECD notes that the 136 countries that have acceded to the agreement “represent more than 90% of global GDP” and are expected to reallocate “more than $ 125 billion in profits from about 100 of the world’s largest and most profitable multinationals.” peace “by ensuring that they pay the taxes they owe.
Among the 136 acceding countries, the 20 most industrialized countries of the world (which make up the G20) and the countries of the European Union stand out, despite restraint originally caused by Ireland, Hungary and Estonia…
The new minimum corporate tax rate will apply to companies with revenues of over 750 million euros and is estimated to generate “around $ 150 billion in additional global tax revenue” per year. Companies with $ 125 billion in profits “must be redeployed annually to market jurisdictions.”
Victory for “multilateralism” in the digital and global economy
“This is a big win for an efficient and balanced multilateralism. This is a far-reaching agreement that ensures that the international tax system is adequate in a digitized and globalized world economy, ”says OECD Secretary General Mathias Kormann.
The OECD Secretary General says it is now necessary “to work quickly and hard to ensure the effective implementation of this major reform.” After this agreement, the countries will enter a phase of adjustments and negotiations, which is expected to culminate in the entry into force of the tax in 2023.
In response to the agreement’s approval, European Commission President Ursula von der Leyen said it was “a historic moment” and “an important step towards a more equitable international tax system.” “We will work closely with the member states to ensure that the EU moves in a coordinated way on this proposal,” he added.
