U.S. Proposal for Global Minimum Tax Gets Backing From 130 Countries
A 15 percent minimum tax rate would generate $150 billion in additional tax revenue each year, the Organization for Economic Cooperation and Development said.
A U.S. proposal for a 15 percent global minimum tax wins the support of 130 countries.
Janet Yellen, the Treasury secretary, who has pushed for a global tax on multinational corporations.Credit…Pool photo by Greg Nash
By Eshe Nelson
July 1, 2021, 12:19 p.m. ET
A plan for a new global tax system that would ensure multinational corporations pay a fair share of tax wherever they operate and earn profits has been endorsed by 130 countries, the Organization for Economic Cooperation and Development said on Thursday.
The new system, including a 15 percent minimum corporate tax rate put forward by the United States, was approved in June by finance leaders of the Group of 7 nations.
Some details still need to be worked out, including how to execute the plan, which is expected to be finalized in October, the O.E.C.D. said. But the organization says it expected taxation rights on more than $100 billion of profits to be reallocated from the companies’ home countries to the other markets where they operate.
The 15 percent minimum tax rate is estimated to generate $150 billion in additional tax revenue each year, the organization said.
“The framework updates key elements of the century-old international tax system, which is no longer fit for purpose in a globalized and digitalized 21st century economy,” the O.E.C.D. said in a statement.