The Global Minimum Corporation Tax Rate: an Apex Group Guide to The Largest International Tax Reform in History
Speaking at the World Economic Forum in Davos on May 29, 2022, Organisation for Economic Co-operation and Development (“OECD”) Director-General Mathias Cormann said there were “difficult discussions under way” and that the landmark agreement on a global minimum corporation tax rate would now come into effect from 2024 at the earliest.
On October 12, 2020, the OECD published its Blueprint for the Inclusive Framework on Base Erosion Profit Shifting (“the Inclusive Framework”). A key part of the Inclusive Framework is the proposals for a global minimum rate of corporation tax. This subsequently gained mainstream media covers following the meeting of the Group of Seven (“G7”) Finance Ministers in London in June 2021.
By July 9, 2021, 132 countries and jurisdictions, representing more than 90% of global GDP had signed up to the OECDs Inclusive Framework, with a target date for the proposals to be implemented by Member States with effect from January 1, 2023.
The comments quoted above from OECD Director General Mathias Cormann put emphasis on the fact that the January 1, 2023, implementation date is no longer considered feasible. The key question, given the political momentum behind the proposals, is what has happened to result in the delayed timetable for implementation?
In our latest update, we review some of the reasons for the delays and the key political obstacles which still need to be addressed before the global minimum corporation tax rate is finally introduced.
If you would like a recap of the proposals, please see our previous publication, “A Global Corporation Tax Rate: Understanding the OECD’s proposal”.
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