Global tax reforms target multinationals like Facebook and Amazon – but some countries won’t sign up

(FILES) In this file photo taken on December 18, 2020, an illustration picture taken in London shows the logos of Google, Apple, Facebook, Amazon and Microsoft displayed on a mobile phone and a laptop screen. - US lawmakers on June 23, 2021 launched a contentious debate on legislation aimed at curbing the power of Big Tech firms with a sweeping reform of antitrust laws. House Judiciary Committee members began what was expected to be lengthy debate preceding a vote on five bills with potentially massive implications for large online platforms and consumers who use them. (Photo by JUSTIN TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images)
Global leaders have agreed on major tax reform for multinationals companies (Credits: Justin Tallis/AFP via Getty Images)

130 countries have signed up to a major deal that will see global firms like Facebook, Apple and Amazon, pay at least 15 percent tax.

The agreement, announced by the Organisation for Economic Co-operation and Development on Thursday, could bring in more than $150bn (£109bn) extra tax revenue for governments.

The signing countries represent more than 90% of the world’s gross domestic product.

But some low-tax countries, including Ireland and Hungary, are missing from the list.

They have the lowest corporate income tax rates in the European Union, at 12.5% and 9%, respectively.

Irish Finance Minister Paschal Donohoe said he could not endorse the 15% rate, but added he hoped the country would be able to support the deal in some form as negotiations continue.

International officials hope to agree the finer aspects of the deal by October, before a implementing the new rules in 2023.

As well as increasing the minimum tax level for multinationals, the deal aims to shift taxation rights from the country a firm is headquartered to the markets where they make profits.

Tech giants like Facebook and Amazon have been criticised for years for paying low corporation tax in countries where they operate.

OECD Secretary General Mathias Cormann said: ‘After years of intense work and negotiations, this historic package will ensure that large multinational companies pay their fair share of tax everywhere.’

The move comes after a bumper year for global digital firms like Amazon, that have seen profits soar as consumers shifted their spend online during the pandemic.

It also builds on a ‘historic’ deal that saw the world’s wealthiest nations agree to a minimum 15% tax rate for major firms at the recent G7 conference in Cornwall.

MORE : World’s wealthiest, including Elon Musk and Jeff Bezos, paid little to no income tax

MORE : Joe Biden unveils child tax credit of up to $300 per month

Tags
Tech Amazon Apple Facebook