The historic agreement to move forward with the creation of a minimum tax rate on multinationals was accepted this Friday by 136 countries. Portugal was one of the states that adhered to the agreement, under the aegis of the OECD, providing for a fairer taxation of the giants wherever they operate or generate profits.
“After years of intense wins to place the international tax system in the 21st century, 136 jurisdictions joined“, announced the OECD, in a statement, changing that the agreement “updates and finalizes “the principle of political agreement reached in July” to profoundly reform international tax rules”.
Of the 140 countries that are part of the OECD, only four did not adhere to the agreement: Kenya, Nigeria, Pakistan and Sri Lanka. The OECD notes, however, that the 136 countries that have joined the agreement “represent more than 90% of global GDP” and are expected to redistribute “more than 125 billion dollars in profits from around 100 of the biggest and most profitable multinationals in the world, “ensuring that they pay the taxes they owe.
Among the 136 countries that joined, the 20 most industrialized countries in the world (which make up the G20) and the countries of the European Union stand out, despite the reticence raised by Ireland, Hungary and Estonia.
The new minimum corporate tax rate is to be applied to companies with revenue above €750 million and is estimated to generate “about $150 billion in additional global tax revenue” per year. Companies with profits of 125 million dollars, on the other hand, “must be relocated across market jurisdictions each year.”
Victory of “multilateralism” in a digital and global economy
“This is a great victory for an effective and balanced multilateralism. It is a far-reaching agreement that guarantees that the international tax system is adequate in a digitized and globalized world economy”, says the Secretary General of the OECD, Mathias Cormann.
The secretary general of the OECD says that it is now necessary to “work with speed and diligence to ensure the implementation of this major reform”. After this agreement, the countries will enter a phase of adjustments and improvement, which will culminate, it is hoped, with the entry into force of the tax in 2023.
In reaction to the approval of the agreement, the president of the European Commission, Ursula von der Leyen, referred that this is “a historic moment” and “an important step towards making the international tax system more fair”. “We will work closely with member states to ensure that the EU moves forward with the proposal in a cohesive manner,” he added.