Global deal on tax reform will require U.S. involvement to be effective
A global agreement to ensure that large international companies, including IT giants, pay their fair share of taxes, no matter where they are located, will stipulate U.S. participation as a condition to go into effect, Japanese government sources said on Saturday.
Since tech giants known as GAFA, including Google LLC and Apple Inc., are all based in the United States, the requirement is aimed at preventing the country from withdrawing from the agreement before it goes into effect. work, they said.
The tax deal, which includes a global minimum corporate tax rate of 15%, was developed through international negotiations within the Organization for Economic Co-operation and Development and has been approved by the Group of 20 members in October.
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The OECD will finalize the text of the agreement in 2022 for ratification by more than 130 countries and regions, including China and India, so that the new rules can take effect in 2023 as agreed.
About half of the roughly 100 businesses that should be subject to tax are U.S. corporations.
The OECD is considering requiring the participation of other major countries for the implementation of tax rules, such as members of the Group of Seven and China, sources said.
Implementing the agreement with such a requirement should make it difficult for future administrations to withdraw from the United States, they said.
But prospects for the deal’s ratification by the United States remain uncertain as the Senate is equally divided between Democrats and Republicans.