A near-consensus among the 139 jurisdictions participating in OECD-led negotiations was announced Thursday. Finance Minister Chrystia Freeland called it “the next step in the global effort to end the race to the bottom in corporate taxation.” (The Logic)
Talking point: Last week’s deal seeks to establish a 15 per cent worldwide floor, and create new taxing rights for countries in which multinational firms operate, even if they don’t have a physical presence there. It will initially affect companies with revenue over €20 billion and pre-tax profits of more than 10 per cent. Tech giants are among the most likely to be affected by the changes. The OECD hopes to release an implementation plan in October, with new provisions taking effect in 2023. Ottawa has said its own digital services tax will apply in the interim. The U.S. has objected to Canada’s levy; on Friday, Freeland discussed tax issues with Treasury Secretary Janet Yellen.
