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OECD announces major tax reform deal for multinationals

Paris, Oct 9 (IANS) The Paris-based Organisation for Economic Cooperation and Development (OECD) announced that a major reform of the international tax system has been agreed, ensuring that multinational enterprises will be subject to a minimum 15 per cent tax rate from 2023.

Some 136 countries and jurisdictions have agreed to the reform, Xinhua news agency quoted the OECD as saying in its announcement on Friday.

From 2023, a global minimum corporate tax rate of 15 per cent will apply to companies with revenues above 750 million euros ($870 million).

It is estimated this will generate around $150 billion annually in additional global tax revenues, the OECD explained.

The deal should reallocate more than $125 billion of profits from around 100 of the world's largest and most profitable multinational companies around the globe, ensuring that these firms pay a fair share of tax wherever they operate and generate profits.

However, the OECD stressed that the agreement does not seek to eliminate tax competition, rather impose multilaterally agreed limitations on it.

"Today's agreement will make our international tax arrangements fairer and work better," said OECD Secretary-General Mathias Cormann.

The deal is a "major victory for effective and balanced multilateralism", he added.

"It is a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalized and globalized world economy."

The OECD has confirmed that its members are aiming to sign a multilateral convention in 2022 for the effective implementation of the new international corporate tax reform in 2023.