An American tax plan for multinationals has received the support of 130 countries. This was announced by the Organization for Economic Co-operation and Development (OECD). However, a small group of the countries affiliated with that organization do not support the plan.
The American plan aims to ensure that companies that operate in multiple countries pay taxes in all those countries. The companies do not need to have an office in a country for this. In addition, the minimum profit tax for those companies worldwide will be increased to 15 percent.
Under the plan, part of the profits of multinationals will not be taxed in the home country but in the countries where the company actually made that profit. It is expected to generate more than $100 billion in annual profits. Raising the global minimum tax rate to 15 percent is expected to generate about $150 billion in additional tax revenues worldwide each year.
Of the 139 countries that participated in the discussion about a new tax plan, nine do not or do not yet support it. One of the countries that do not support the plans is Ireland, which is seen as a tax haven by many other European countries. The Irish government wants to stick to the 12.5 percent tax rate for large companies, with which the Irish managed to lure many American tech companies such as Apple and Facebook.
Other countries that did not support the United States’ plan include Barbados, Estonia, Hungary, Kenya, Nigeria, Peru, Saint Vincent and the Grenadines and Sri Lanka.