One hundred and thirty-six countries have agreed to impose a minimum tax rate of 15% on multinationals, announced Friday the organization, after the rallies of Ireland, Estonia and Hungary.
“The major reform of the international tax system finalized today at the OECD will ensure the application of a minimum tax rate of 15% to multinational companies from 2023,” said the OECD in a statement. This reform intends to fight against the tax avoidance of multinationals, largely American, which are registered in countries with the lowest tax rates. These 136 countries, including the European Union, China, India and the United States, represent 90% of global GDP. They will be able to generate approximately 150 billion euros in additional revenue thanks to this minimum tax.
A key rallying of several countries
The rallying of Ireland and Estonia on Thursday, two countries that were reluctant to put their signatures on the text, were decisive. The Irish “yes” was described as a “huge step forward” by the European Commissioner for the Economy, Paolo Gentiloni, on Thursday on Twitter.
On Friday, Hungary, the last European Union country not to have taken the plunge, announced that it was also joining the agreement, after having managed to obtain concessions. Budapest, which is proposing a 9% corporate tax rate, is one of the countries that is banking on tax attractiveness.
Several countries, including Kenya, Nigeria, Pakistan and Sri Lanka, did not join the agreement.
Is the agreement sufficient?
This tax rate will apply to companies with a turnover of at least 750 million euros. And thanks to this, the signatory countries of the agreement will be able to recover nearly 130 billion additional euros that previously escaped taxation. But according to some experts, the agreement is far from sufficient. “For Oxfam, a higher tax rate was needed, with no exceptions, especially without a hole in the racket. It should have been a much fairer sharing of tax rights”, explains Quentin Parrinello, spokesman for Oxfam France.
