French President Emmanuel Macron on Saturday hailed a “historic” agreement signed by 136 countries to set a minimum tax rate for multinationals as a major advance in fiscal justice.
The OECD-broker deal, which sets a global tax rate of 15 percent, aims to prevent international corporations from cutting tax bills by registering in countries with lower rates.
The international push for a minimum international tax on large corporations neared reality on Friday, as one of the last holdouts, Hungary, agreed to engage in a reform that now counts 136 countries.
Hungary’s announcement came a day after another major rival Ireland – whose low tax rate has favored the likes of Apple and Google – agreed and agreed to join the global effort.
Estonia also joined the correction on Thursday.
136 countries now represent 90 percent of the global GDP on the board.
Under the deal they will be able to generate about 150 billion euros ($175 billion) in additional revenue from 2023.
“For four years we have been working for fair taxation on multinational companies and digital giants,” Macron said on Saturday.
The French president tweeted, “The tax agreement in the OECD is historic. Every MNC will have to pay a minimum of 15 percent tax. This is a big step for tax justice.”
Some NGOs and economists consider the tax move insufficiently ambitious, arguing that it would create inequality between rich and developing countries.
According to Oxfam, the poorest countries will receive less than three percent of supplemental tax receipts.
(Except for the title, this story has not been edited by NB staff and is published from a syndicated feed.)