Officials from 130 countries and jurisdictions, including India and China, have agreed on the grand scheme of the United States to review the global corporate tax system.
Officials from 130 countries and jurisdictions have backed the U.S. proposal to demand a minimum global corporate tax from 15 percent, a key step in curbing corporate tax evasion, and a important victory for the administration of U.S. President Joe Biden.
The Wall Street Journal was the first report on the agreement Thursday after a virtual meeting of 130 nations and jurisdictions, including all member states of the Group of 20 (G20).
Together, they represent their economies 90 percent of global gross domestic product, according to a press release from the Organization for Economic Co-operation and Development (OECD), which coordinated the negotiations.
India and China were among the countries that approved the proposal after initially opposing it.
The measure represents the largest overhaul of the global tax system in more than a century and has the potential to curb tax avoidance by companies moving their operations to countries with lower tax rates to avoid paying them.
In a tweet Thursday, the OECD director said it is estimated that $ 240 billion a year is lost due to tax avoidance by multinational companies.
In @OCDE @ g20 Inclusive framework meeting today, 130 countries and jurisdictions (> 90% of world GDP) join a bold new international framework #impost reform to ensure that multinational companies pay a fair share of taxes wherever they operate
– Anthony Gooch Gálvez (@pitres) July 1, 2021
Establishing a global minimum corporate tax rate is also a key priority for the Biden administration, which plans to use increased corporate taxes to fund a wide range of infrastructure and social security programs in the U.S. .
U.S. Treasury Secretary Janet Yellen announced the deal as “a clear signal” that “the race to the bottom is one step closer to ending.”
The OECD said officials have “set an ambitious timetable for the conclusion of negotiations”, including an October 2021 deadline for the completion of technical work and a plan for its implementation that will have to be completed. be in 2023.