Global Tax Floor at 15% Is Significant Step, OECD’s Cormann Says

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A 15% global minimum corporate tax rate would be a “very significant step forward” that leaves countries enough margin to compete, Organization for Economic Cooperation and Development Secretary General Mathias Cormann said.

The comments from the new secretary general at OECD, which is running global talks on the topic, come after the Group of Seven struck a deal for a rate of “at least 15%.” Some countries, including France, said they would still push for a higher floor.

“It’s important we strike the right balance,” Cormann told Bloomberg Television’s Tom Keene and Lisa Abramowicz. “If we were able to achieve a circumstance where all multinational companies operating globally are required to pay at least 15% on their profits, I think that is a very significant step forward”

Global Tax Floor at 15% Is Significant Step, OECD’s Cormann Says

Small countries, including Ireland, have expressed concern about a global deal that could undermine their efforts to attract multinationals.

The 15% rate would still leave room for “appropriate competition” between nations based on fiscal policy and tax, Cormann said.

The deal being negotiated at the OECD also includes new rules to make sure the largest companies, and particularly tech firms, pay a greater share of their tax bills in places where they do business, rather than where they are headquartered.

The G-7 made some progress on that matter, agreeing on parameters for how much profit could be reallocated to different jurisdictions. But it didn’t finalize the details. These could still prove difficult to resolve, notably which companies would be subject to the new rules.

A round of talks is scheduled for the end of June, ahead of a meeting of Group of 20 finance ministers who could back a more detailed agreement.

“I’m quietly hopeful, quietly optimistic that when it’s all said and done we will be able to reach an outcome in the next little while,” Cormann said.

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