OECD "130 Countries Agree on Global Minimum Corporate Tax Rate of 15%"

[Asia Economy Reporter Park Byung-hee] Approximately 130 countries worldwide have agreed to set a global minimum corporate tax rate at 15%, Bloomberg News and others reported on the 1st (local time).

The Organisation for Economic Co-operation and Development (OECD), which led the discussions, stated in a press release on the 1st (local time) that 130 countries representing more than 90% of the world's Gross Domestic Product (GDP) have reached this consensus.

All of the major 20 countries (G20), including China and India, agreed to set the corporate tax rate at a minimum of 15%, and it is expected that a principle approval will be made at the G20 Finance Ministers meeting held in Venice next week.

The OECD stated that this is expected to generate additional tax revenue worth approximately $150 billion (about 170 trillion won) annually. Furthermore, the taxing rights on companies generating profits exceeding $100 billion (about 113 trillion won) will be transferred to the countries where the sales occur.

A total of 139 countries participated in the working group to prepare this tax reform plan, but nine countries, including Ireland, did not sign the agreement. Ireland has maintained a corporate tax rate of 12.5%, the lowest in Western Europe, attracting companies seeking to establish branches in Europe.

The OECD has set a goal to establish detailed implementation plans by October this year and to enforce them starting in 2023.

The establishment of a minimum corporate tax rate was designed to prevent global giants such as Google, Facebook, and Amazon from avoiding taxes by setting up corporations in countries with low corporate tax rates.

Earlier, the G7 finance ministers agreed on setting a global minimum corporate tax rate and on a plan for highly profitable multinational corporations to pay taxes on part of their profits to the countries where their sales occur.

This content was produced with the assistance of AI translation services.