More than 130 Countries Agree on Minimum Corporate Tax

More than 130 countries have agreed to major changes in global corporate taxes, including a minimum corporate rate of 15 percent to prevent multinationals from keeping profits in countries with low tax rates.

The deal, announced Friday, is an attempt to tackle the ways globalization and digitization have transformed the world economy. The deal would allow states to tax a portion of the income of companies located elsewhere that make money through online retail, web advertising and other activities.

US President Joe Biden is also pushing for the deal as governments around the world seek to increase revenue in the wake of the COVID-19 pandemic.

The 136-nation agreement, which represents 90 percent of the global economy, was announced by the Paris-based Organization for Economic Co-operation and Development (OECD), which hosted the talks that led to the agreement. The OECD said the minimum tax would reap about $150 billion for the government.

Big US tech companies such as Google and Amazon are backing the OECD negotiations. The reason, among other things, is that countries will agree to tax individuals digital services they have imposed on companies in exchange for the right to tax a portion of their income under the global scheme. (ka/lt)

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