Politics

Push to tax the rich gathers pace as OECD moves on the corporate sector

It’s been a long time coming, and it’s still not perfect, but 136 countries are tackling corporate tax evasion.

OECD Secretary General Mathias Cormann delivers an inaugural speech at the 60th OECD ministerial meeting in Paris (Image: EPA/Ian Langsdon)

Finally, some (reasonably) good news: after years of negotiations, 136 countries have reached an agreement to tackle corporate tax evasion.

The deal brokered in Paris on Friday has two “pillars”. The first involves taxing a slice of the world’s largest multinational companies’ profits based on where their sales occur, which aren’t so easily siphoned off to tax havens. The second is a global minimum corporate tax rate of 15%. If properly implemented, these measures would make “jurisdiction shopping” far less practicable and lucrative.

It’s not a perfect deal, partly due to last-minute horse-trading to win over recalcitrant low-taxing countries. The 15% rate is lower than many had recommended, and the words “at least” were dropped to appease evasion-enabler Ireland, stalling momentum for increasing the rate in coming years.

Are we getting closer to a fairer global tax system? Read on…

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