More than 100 countries agreed on Friday a reform of the international tax regime, responding to longstanding concerns about corporate tax evasion, Euractiv.com reports.
The agreement brokered by the Organisation for Economic Cooperation and Development (OECD) reforms the international tax system. It allows the taxation of multinational firms where they generate profit, instead of where they are located. A minimum corporate tax rate of 15% was agreed.
The Democrat-led US government praised the agreement. EU Commission president Ursula von der Leyen called the agreement a “historic moment” and “a major step forward in making our global tax system fairer”.
Some of the EU countries – most notably Estonia, Ireland and Hungary – originally refused to sign the agreement in July: they feared that it would humper their low corporate tax systems, but in the end they agreed to the final version of the new tax system.