OECD agrees on tax reform – Ireland gives up resistance | Free press

by time news

Dublin / Paris (dpa) – After the previous low-tax country Ireland gave in, an important hurdle for a global reform of corporate taxes has been cleared.

The Organization for Economic Cooperation and Development (OECD) ended the technical talks after years of negotiations with an agreement at a meeting in Paris on Friday. Internationally active companies should therefore pay at least 15 percent tax regardless of their headquarters, as the OECD announced. The regulation should take effect from 2023. Of the 140 OECD members, only Kenya, Nigeria, Pakistan and Sri Lanka have not yet joined.

In July, the G20 finance ministers decided on two innovations: Internationally active companies should pay “at least” 15 percent tax regardless of where they are based. If a company with its subsidiary pays less taxes abroad, the home country can collect the difference. This is to prevent profits from being shifted to tax havens. In addition, large companies should no longer only be taxed in their mother country, but also where they do good business. The OECD expects the minimum tax alone to generate 150 billion dollars (about 130 billion euros) of additional tax revenue worldwide.

Scholz: An important step towards fair taxation

“Today we have taken another important step towards more fair taxation,” said Federal Finance Minister Olaf Scholz (SPD). “In particular, the approval of the states of the European Union is a great success and will ensure that the reform can be implemented quickly across the EU.” EU Commission President Ursula von der Leyen spoke of a historic moment. “This is an important step to make our global tax system fairer.”

READ Also:  Rome is a war for outdoor tables, bars and restaurants ready to resort to the Tar

US Treasury Secretary Janet Yellen hailed the deal as a once-in-a-generation achievement of economic diplomacy. “We have turned tireless negotiations into decades of increased prosperity – for America as well as for the world,” said Yellen after a message circulated by her ministry. Your French colleague Bruno Le Maire spoke of an essential agreement for the economies of the countries. “This agreement opens the way for a tax revolution.”

Well-known tax havens such as the Cayman Islands are now also involved in the agreement. Likewise Ireland, which bowed to international pressure shortly before the OECD agreement. The cabinet in Dublin decided on Thursday evening to increase the tax rate for companies with a turnover of more than 750 million euros from 12.5 to 15 percent. Ireland, where large digital corporations have their European headquarters, is thus avoiding further arguments with the G20 group of top economic powers.

Donohoe: “It’s the right decision”

Dublin’s commitment was brokered by the OECD. Irish Finance Minister Paschal Donohoe said it was a far-reaching reform of the global tax framework. «It is the right decision. It’s a sensitive and pragmatic decision. ” In the EU country, dozens of companies with hundreds of thousands of employees are affected by the change, which is expected to come into force in 2023. The government in Dublin estimates its loss due to the tax increase at 800 million to 2 billion euros per year. In addition to Ireland, Estonia and Hungary from the EU had so far resisted the reform.

There was also a shift in Estonia, as the Estonian Prime Minister Kaja Kallas announced on Thursday evening. “We have held intensive negotiations all summer to achieve a situation in which Estonian entrepreneurs are affected as little as possible by this global tax,” said Kallas.

READ Also:  Artificial intelligence: Tesla wants to build robots for dangerous or boring work

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.