Nearly 140 nations have agreed on a tentative deal that would make sweeping changes to how big, multinational companies are taxed. The deal foresees countries enacting a global minimum corporate tax of 15% on the biggest internationally active companies.
The deal announced Friday is an attempt to address the ways globalization and digitalization have changed the world economy. It would allow countries to tax some of the earnings of companies located elsewhere that make money through online retailing, web advertising and other activities.
“Rather than competing on our ability to offer low corporate rates,” she said, “America will now compete on the skills of our workers and our capacity to innovate, which is a race we can win.” That means the companies would deal with just the one international tax regime, not a multitude of different ones depending on the country.
Although the Irish agreement was a step forward for the deal, developing countries have raised objections and Nigeria, Kenya, Pakistan and Sri Lanka have indicated they will not sign up.
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