The international community finalised a major reform last week on 8 October 2021, ensuring that all multinational enterprises (MNEs) will be subject to a minimum 15% corporate tax rate from 2023.
Agreed by 136 countries and jurisdictions representing over 90% of the world's GDP, the deal will reallocate more than $125 billion of profits from around 100 of the world's most profitable MNEs to governments worldwide, the OECD said.
The agreement means firms with at least a 10% profit margin will see 25% of any profit above said margin reallocated and then subjected to the tax rate in the countries in which they operate and not just where they have their headquarters.
The deal also commits signees to at least a 15% corporation tax rate, seeing nations increasing their domestic rates, including the Republic of Ireland.
"Today's agreement will make our international tax arrangements fairer and work better," said OECD secretary-general Mathias Cormann.
"This is a major victory for effective and balanced multilateralism. It is a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalised and globalised world economy."
UK Chancellor of the Exchequer, Rishi Sunak, said:
"We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business."
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