London: Nearly 140 countries have agreed on a tentative deal that would make sweeping changes to how big, multinational companies are taxed in order to deter them from stashing their profits in offshore havens where they pay little or no tax.
The agreement announced Friday foresees countries enacting a global minimum corporate tax of 15% on the biggest, internationally active companies. US President Joe Biden has been one of the driving forces behind the agreement as governments around the world seek to boost revenue following the COVID-19 pandemic.
The agreement was announced by the Paris-based Organisation for Cooperation and Economic Development, which hosted the talks.
The OECD deal is an attempt to deal with the ways in which globalisation and digitalisation have changed the world’s economy. Alongside the global minimum tax, the deal would let countries tax part of the earnings of companies whose activities don’t involve a physical presence, such as internet retailing or web advertising.