Led by the OECD, agreements were reached between 136 countries. Major technology companies can no longer use different countries to evade taxes.
Led by the OECD (Organization for Economic Cooperation and Development), an agreement was signed between 136 countries for a worldwide tax of 15 percent. Under the agreement, technology companies will no longer be able to go to tax havens to attract investors to avoid taxes. This agreement, which is valid internationally, would be the biggest reform in recent years.
Technology companies that want to reduce their tax burden can no longer relocate their activities to underdeveloped or developing countries; It also includes new rules that will force multinationals to declare profits and pay more taxes. However, an additional clause was added to this agreement by the Biden administration. For the next 2 years, no additional taxes will be levied on companies such as Facebook, Google and Amazon.
Tech companies and billionaires wanted to break the deal!
Many countries, especially the US, sat around the table to sign this bill. However, while countries like Ireland, China and Brazil show that they are holding back; Sri Lanka, Pakistan, Nigeria and Kenya showed strong resistance not to sign. In addition, Ireland made sure to remove the “minimal” part of the sentence, which was voted as “at least 15 percent” last week. For example, after the approved agreement, companies were prevented from levying more than 15 percent tax.
Many technology companies and investors, already benefiting from foreign tax havens, tried to cancel the deal. However, it is estimated that companies, understanding that the agreement will not be canceled due to the determined stance of the G20 countries and the OECD, some countries have put pressure on the amount to be added to the additional tax burden.
$150 Billion in Additional Revenue Will Go Down the Vault
Following negotiations in Dublin, Ireland, which reduced the tax burden on businesses during the agreement, the tax on international businesses increased from 12.5 percent to 15 percent. With this move, Ireland showed that it was avoiding conflict with the G20 countries, which it opposed in the OECD-led negotiations.
The OECD said it expects this deal alone to generate nearly $150 billion in additional tax revenue worldwide. Almost all OECD countries (even tax havens like the Cayman Islands) had given the necessary approvals before the agreement. The G20 countries have also been working on the issue since last summer and have already reached an agreement among themselves.
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