More than 145 countries have agreed to amend a 2021 global minimum corporate tax agreement, addressing concerns in the United States that the rules could penalise US multinational companies.
The Organisation for Economic Cooperation and Development said the fresh package preserves the 15 per cent global minimum tax framework designed to ensure large multinationals pay a baseline tax wherever they operate.
The update includes simplifications and carve-outs to align US minimum tax laws with global standards, accommodating earlier objections raised by US President Donald Trump’s administration.
OECD’s Australian head Mathias Cormann said in a statement the arrangement “enhances tax certainty, reduces complexity and protects tax bases”.
As of October, more than 65 countries had begun implementing the 2021 global tax deal, which requires them to apply a 15 per cent corporate tax or impose a top-up levy on multinationals booking profits in jurisdictions with lower tax rates.
The revised agreement solidifies global backing after G7 countries, including the US, brokered a deal in June exempting some US companies from parts of the original framework.
A broader agreement, reached on Monday after the US pressured holdouts to back the updated arrangement, helps stabilise the global deal.
The pact’s future was thrown into doubt last January when Trump criticised the 2021 deal negotiated by the administration of his predecessor Joe Biden, saying it was not applicable in the US.
Trump’s administration threatened retaliatory taxes against countries that imposed levies on US firms under the 2021 deal.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
