International agreement for the application of a minimum tax on multinationals with exceptions for the U.S.
The OECD argues that "it constitutes a historic decision in the area of international tax cooperation"
BarcelonaThe Organisation for Economic Co-operation and Development (OECD) announced on Monday that 147 countries have agreed to implement a global minimum tax for multinational corporations after years of negotiations, including a parallel regime that appeases the United States under Donald Trump. The OECD described it as a "juxtaposed solution" that represents "a major political and technical compromise that will lay the foundations for stability and legal certainty in the international tax system." It also ensures that the gains achieved during the long negotiation process, which led to an initial agreement in October 2021, are maintained. "It constitutes a historic decision in the area of international tax cooperation," said OECD Secretary-General Mathias Cormann. The new agreed-upon regime comes after the G-7 economies negotiated in June an exemption for US companies from some elements of the global agreement designed in 2021 to establish a minimum corporate tax, with a minimum effective rate of 15%. The United States had rejected it after Trump's return to the White House, threatening to impose "retaliation taxes" if it were applied to US companies. Following the G-7 agreement, the US government announced the withdrawal of these taxes from its draft budget legislation. With the agreement announced this Monday, the differentiated system for US companies will allow "the establishment of new protection regimes for multinational groups whose parent company is located in an eligible jurisdiction that meets minimum taxation criteria." This stems from a compromise reached at the end of June by the G-7 countries, which was criticized by Spain, allowing the US to maintain its regime on profits earned by its multinationals abroad. Beyond this particularly contentious issue, the agreement reached within the OECD includes other points, such as simplification measures that will reduce the cost to multinationals and tax authorities for calculating and reporting taxes. It also establishes "greater consistency" in tax incentive mechanisms and "an evidence-based balance to ensure a level playing field for all." These elements also affect the United States.
