Nations agree to 15% minimum corporate tax rate

Some 136 countries agreed to enforce a corporate tax rate of at least 15%, as well a fairer system of taxing profits where they are earned. It follows concern that multinational companies are re-routing their profits through low tax jurisdictions to cut their bills. Yet critics say a 15% rate is too low, and firms will get around the rules. UK Chancellor Rishi Sunak said the deal would “upgrade the global tax system for the modern age”. “We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business,” he said. The Organisation for Economic Cooperation and Development (OECD), an intergovernmental organisation, has led talks on a minimum rate for a decade. It said the deal could bring in an extra $150bn (£108bn) of tax a year, bolstering economies as they recover from Covid. Yet it also said it did not seek to “eliminate” tax competition between countries, only to limit it.


The floor under corporate tax will come in from 2023. Countries will also have more scope to tax multinational companies operating within their borders, even if they don’t have a physical presence there. The move – which is expected to hit digital giants like Amazon and Facebook – will affect firms with global sales above 20 billion euros (£17bn) and profit margins above 10%. A quarter of any profits they make above the 10% threshold will be reallocated to the countries where they were earned and taxed there.

https://www.bbc.com/news/business-58847328

Published by charlesghose

Charles Ghose graduated the University Of Greenwich London with a BA in Communications and Media. His university life was very enriched by his very active participation in various University societies. Charles ran the gamut of campus student communities; he was involved with the Politics and Debate Societies, Students Union, and University Of Greenwich Choir, and chamber choir. Charles Ghose acts as an independent contractor working in the very lucrative Freelance Translator Field. He has been hired by various International Humanitarian NGO's, private corporations, and The Overseas Fellowship Mission. Charles has also lead workshops for employers on the theme of mindfulness training courses for the improvement of employee’s health and well-being. Charles is a strong believer that a happy work force adds to higher productivity and loyalty to a company by employees.

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