In November, 2022 a global deal to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been agreed by 136 countries.
What is Global Minimum Tax
- EU members have agreed to implement a minimum tax rate of 15% on big businesses
- It is accordance with Pillar 2 of the global tax agreement framed by the Organisation for Economic Cooperation and Development (OECD) in 2021.
- This is to ensure that big businesses with global operations do not benefit by domiciling themselves in tax havens in order to save on taxes.
- On February 2, 2023, the OECD/G20 Framework on BEPS released technical guidelines to assist governments with implementation of the landmark reform to the international tax system, which will insure multinational enterprises (MNEs) will be subject to a 15% effective minimum tax rate.