What Is a Global Corporate Minimum Tax?
A global corporate minimum tax is a tax regime established by international agreement whereby countries adhering to the agreement would impose a specific minimum tax rate on the income of corporations subject to the respective jurisdictions’ tax laws. Each country would be entitled to share in the revenue generated by the tax. The agreement also would prescribe a definition of “income” and other technical and administrative rules.
On Oct. 8, 136 countries and jurisdictions agreed to a proposal developed by the Organisation for Economic Co-operation and Development (OECD) that includes establishing a 15% global minimum tax, starting in 2023.1
The proposal was designed to discourage tax-motivated profit shifting and base erosion by multinational corporations (MNCs).
