The heads of state and government of the G20 approved this Saturday the historic agreement on a reform of international taxation, which aims to put an end to tax havens by establishing a minimum global tax of 15% on the profits of multinationals.

"Today, all of the G20 heads of state approved a historic agreement on new international tax rules, including a global minimum tax, which will end the race to be the lowest on corporate tax." US Treasury Secretary Janet Yellen said in a statement.

This agreement was concluded in early October under the aegis of the OECD by 136 countries, which represent more than 90% of world GDP.

The reform should allow these countries to generate around 150 billion dollars in additional revenue per year thanks to this minimum tax.

One part of the agreement is to reallocate part of the profit tax paid by multinationals to the countries where they do business.

The tax will therefore no longer be due only where their headquarters are located.

In the line of sight, companies which achieve more than 20 billion euros of turnover worldwide and whose profitability exceeds 10%.

This threshold will potentially be reduced to 10 billion after seven years.

A minimum effective tax rate of 15% on the profits of multinationals

The objective of the reform: to prevent multinationals and especially Gafa (acronym designating the giants Google, Amazon, Facebook and Apple), which have greatly benefited from the Covid-19 pandemic and the confinements, from paying derisory taxes with regard to of their income.

The other part of the reform is the introduction of a minimum effective tax rate of 15% on the profits of multinationals.

A state will be able to tax the foreign profits of one of its national companies which would have been taxed abroad at a rate lower than this minimum rate, in order to compensate for the difference.

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The rallying in extremis to the agreement of Ireland, Hungary and Estonia in early October had enabled the OECD to conclude the negotiations just in time for the Rome summit.

Their membership was crucial, because France wishes to take advantage of its rotating presidency of the European Council from January 2022 to have the minimum tax adopted by a European directive, which requires unanimity.


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