Global tax treaty from 130 countries

Global tax treaty from 130 countries

The Organization for Economic Co-operation and Development (OECD) reported that 130 countries have agreed to tax multinational companies at least 15 percent in countries where they operate.

The OECD announced that 130 countries representing 90 percent of the global Gross Domestic Product (GDP), including the USA, China, Germany, France, England, Japan and Turkey, have agreed on international tax reform.

According to the agreement, multinational companies will be able to pay taxes where they operate and generate profits.

This practice will add legal certainty and stability to the international tax system.

The distribution of profits and taxes between the countries of the largest multinational companies, including companies operating in the digital field, will be done fairly.

Some rights to tax multinational companies will be allocated from the host country where the companies do business and generate profits.

A fair competition environment will be prepared for corporate tax. For this, a global minimum corporate tax rate will be introduced.

Multinational companies will be subject to a corporate tax of at least 15 percent in each country in which they operate.

At this rate, annual tax revenue of 150 billion dollars will be generated globally.

The deal is expected to prevent digital platforms and large firms in particular from avoiding paying taxes with various apps.

It was noteworthy that the European Union (EU) members Ireland and Hungary did not join the agreement.

The technical details of the tax agreement are expected to be finalized by October and the plan to be implemented in 2023.

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