OECD introduces 15% minimum corporate tax from 2023

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A global agreement on a 15 percent minimum corporate tax has been agreed, the Organization for Economic Co-operation and Development (OECD) announced today, quoted by Reuters, BTA reported.

This came after Ireland, Estonia and Hungary finally agreed.

The aim is to end the practice of large companies evading taxes or avoiding paying them. In addition, the agreement must put an end to the competition between the parties, which began four decades ago, to attract investment and jobs by taxing them with minimal taxes.

So far, this does not affect Bulgaria, which is not a member of the OECD. However, our country is a candidate to join the organization and only two days ago Deputy Prime Minister Atanas Pekanov and Finance Minister Valeri Belchev confirmed at the same annual meeting in Paris Bulgaria’s determination to join the organization.

Negotiations lasted four years. They received impetus from the economic crisis caused by the pandemic of the new coronavirus, as well as the support of US President Joe Biden, who took office in January, Reuters notes.

136 of the 140 countries participating in the negotiations supported the agreement. Kenya, Nigeria, Pakistan and Sri Lanka have abstained so far.

According to the OECD, which is playing a leading role in the negotiations, the deal will cover 90 percent of the world economy.

“Today’s agreement will make our international tax system fairer and better working. This is a great victory for effective and balanced multilateralism,” said OECD Secretary-General Matthias Corman.

The Paris-based organization estimates the minimum corporate tax will provide countries with additional revenue totaling about $ 150 billion a year. In addition, more than 125 billion in tax revenue will be redirected to countries where large multinational corporations have actually carried out their activities.

“Today we have taken another important step towards greater tax justice,” said German Finance Minister Olaf Scholz.

His British counterpart, Rishi Sunak, whose country holds the rotating G-7 chairmanship, said the agreement paved the way for “a fairer tax system where big players pay (fair taxes where they do business”).

The Swiss Ministry of Finance has asked that the interests of small economies be taken into account. The deadline set by the OECD for the new rules to enter into force in 2023 is impossible to meet, he said in a statement.

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