Global Tax Overhaul

21-10-8 Global economic development arm overhauls tax rate - Reuters > .

21-7-2 Global tax overhaul backed by 130 countries: 

Officials from 130 countries have agreed to overhaul the global tax system to ensure big companies "pay a fair share" wherever they operate. The OECD said on Thursday that negotiators had backed a proposed minimum corporate tax rate of at least 15%.

The Organisation for Economic Co-operation and Development (OECD), which led the talks, said that the plans could generate about $150bn (£109bn) in tax revenues annually.

Tax on big tech firms has been a source of friction between the US and others. US Treasury Secretary Janet Yellen said: "Today is an historic day for economic diplomacy." Yellen said the agreement sent a sign that a "race to the bottom" on tax rates was coming to an end. "For decades, the US has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response. The result was a global race to the bottom: Who could lower their corporate rate further and faster?" She said that "no nation" had won the race.

The Biden administration has been pushing for a deal internationally while it seeks to raise taxes domestically. It has, for example, called for an increase in the US corporate tax rate from 21% to 28%.

This agreement has been years in the making. The talks had lost momentum, reflecting to a large extent the United States' lack of enthusiasm for either of the main proposals. [Pro-corporate hesitancy] changed with the new administration, which took power in Washington in January. President Joe Biden and his Treasury Secretary, Janet Yellen, wanted a deal and made specific proposals. They want to raise more tax to repair the public finances after the pandemic and to cover their spending plans.

The Paris-based organisation confirmed that [tax haven] Ireland, [failing democracy] Hungary, and  - countries with low corporate taxes - have not joined the deal on the global minimum. If the deal works as planned, though, staying out won't help them. It includes a "top-up" provision, so that a parent company would get an additional bill if a subsidiary paid less than the minimum.

All G20 countries, such as the US, UK, China, and France, did back the agreement. Participating governments are now expected to try to pass relevant laws to bring in the minimum, although details such as possible exemptions for certain industries are still up for negotiation.