OECD chief Matthias Cormann. (file photo)
Digital Desk, New Delhi. More than 145 countries on Monday agreed to amend the global minimum corporate tax agreement for 2021. This addressed Washington's concerns that these rules could harm American multinationals.
The Organization for Economic Co-operation and Development (OECD) said the global minimum tax structure of 15 percent has been retained in the new package. It is designed to ensure that large multinational companies pay a fixed tax wherever they operate.
Updated tax system has been simplified
The updated tax system has been simplified to bring US minimum tax laws in line with global standards and contains some exceptions, which address previous objections raised by the Trump administration.
OECD chief Matthias Cormann said the arrangement increases tax certainty and reduces complexity. It protects tax bases. By October last year, more than 65 countries had started implementing the 2021 global tax agreement. Under this, it is mandatory for countries to implement 15 percent corporate tax or impose additional tax on multinational companies making profits in low tax areas.
Doubts were raised over the future of this agreement in January last year, when President Donald Trump criticized the 2021 agreement made by the Biden administration, saying that it does not apply in the US.
Also read: 130 countries including India signed global minimum tax agreement for companies, know what will be the benefit.