Officials from 130 countries and jurisdictions, including India and China, have agreed to the outline of the United States to comprehensively reform the global corporate tax system.
Officials from 130 countries and jurisdictions expressed support for the United States’ proposal to require a minimum tax rate of 15% for global companies. This is a key step to curb corporate tax avoidance, and it is also a major step in the administration of US President Joe Biden. victory.
The Wall Street Journal is the first Agreement report On Thursday, 130 countries and jurisdictions, including all member states of the Group of 20 (G20), held a virtual meeting. India and China became one of the countries that approved the proposal after initially opposing it.
Their economic co-representatives Account for 90% of global GDPAccording to a press release from the Organization for Economic Cooperation and Development (OECD) that coordinated negotiations.
This move represents the largest reform of the global tax system in more than a century, and has the potential to curb tax avoidance by companies that transfer their business to countries with lower tax rates to avoid paying taxes.
In a tweet on Thursday, the head of the OECD stated that due to tax avoidance by multinational companies, an estimated annual loss of 240 billion US dollars.
in @OECD @g20 Today’s Inclusive Framework Conference, 130 countries and jurisdictions (accounting for more than 90% of global GDP) joined the bold new framework international #tax Reform to ensure that multinational companies pay a fair share of taxes where they operate
— Anthony Gucci Galvez (@pitres) July 1, 2021
Setting the world’s lowest corporate tax rate is also a key priority of the Biden administration, which plans to use the increased corporate tax to fund various infrastructure and social safety net programs in the United States.
U.S. Treasury Secretary Janet Yellen called the agreement “a clear signal” that “the race to the bottom is one step closer to the end”.
The OECD stated that officials “set an ambitious timetable for the conclusion of negotiations”, including a deadline for completion of technical work in October 2021 and a plan for implementation in 2023.