W HAT’S N E X T?
The agreement reached at the OECD will
be taken up by the Group of 20 countries
representing 80 percent of the global economy.
However, all 20 G-20 countries joined in signing
the OECD deal, indicating broad agreement, at
least with the outlines. The G-20 could give its
final blessing at a summit Oct. 30-31 in Rome.
The global minimum tax would be voluntary.
So countries would have to enact it into
their own national tax codes on their own
initiative. The proposal to tax companies
on earnings where they have no physical
presence, such as through online businesses,
would require countries to sign up to a written
international agreement.
Some countries that took part in the OECD
talks did not sign the agreement. They include
Ireland and Hungary, both of which have
corporate tax rates below the 15% minimum.
Ireland’s finance minister, Paschal Donohoe,
has said Ireland’s 12.5% rate is “a fair rate.”
Donohoe said after the deal was announced
that despite reservations about the rate,
he remains “committed to the process”
and aims “to find an outcome that Ireland
can yet support.”
According to Gabriel Zucman, an economics
professor at the University of California at
Berkeley who has written extensively on tax
havens, the minimum tax will still work even if
some countries don’t sign up. He said in a tweet
that “the fact remains: If some countries refuse
to apply a minimum tax, then other countries
will collect the taxes they refuse to collect.”