Deal reached in respect of global minimum corporate tax of 15%

In a previous alert, which can be accessed here, we highlighted a proposed new tax system, which will set an effective global minimum tax of 15% on multinationals with more than EUR 750 million in revenue.

On Friday the 8th of October 2021, the OECD announced that a global deal has been agreed on by 136 nations, in this regard. It was announced that Kenya, Nigeria, Pakistan and Sri Lanka had not joined the agreement.

The OECD’s Secretary-General noted that the agreement is “a major victory for effective and balanced multilateralism” and said the following in a statement:

"Today's agreement will make our international tax arrangements fairer and work better."

One notable point is that Ireland, who initially declined to sign up to the deal, has agreed thereto. Large multinationals and blue chip companies based in Ireland will accordingly lose the benefit of the current 12.5% tax rate. Firms with an annual turnover below 750 million euros will continue to pay tax at the 12.5% rate.

14/10/2021