Global Tax Pact for Multinationals

PARIS (Reuters) – The Organisation for Economic Cooperation and Development (OECD) remains optimistic about finalizing a global tax agreement for highly profitable multinationals, according to its head of tax.

After months of delays from major countries, nearly 130 countries and jurisdictions failed to meet a mid-year deadline to finalize the treaty terms, mainly affecting U.S. digital giants.

This pact is part of a two-pillar corporate tax reform initiative agreed upon in 2021, designed to replace unilateral digital service taxes with new regulations for sharing tax rights among companies like Google, Amazon, and Apple.

Manal Corwin, the OECD tax director, stated, “There is 100% commitment among members to get it done.” She emphasized the high sense of urgency and expressed the hope to finalize the treaty by year-end.

Currently, the U.S. points out that countries like India, China, and Australia are still hesitant regarding alternative transfer pricing calculations.

In the meantime, nations have started implementing the second pillar of the 2021 tax agreement, which includes a minimum corporate tax rate of 15% and a top-up levy for multinationals operating in low-tax countries. Recently, 19 countries have either signed or committed to a treaty allowing developing nations to impose taxes on certain outbound intra-company payments, as reported by the OECD.