130 companies are restructuring the global minimum tax for large companies

About 130 countries have agreed to the World Organization At least Tax, an idea approved by President Joe Biden. The lower tax is part of an international effort to avoid the tax of multinational corporations.

The deal was announced last Thursday. It is an attempt to address the difficulties of the interconnected and growing online global economy.

The contract pays at least 15 percent of the overall tax. This is important as Biden seeks to raise more money for his US employment program. Technical details are yet to be developed. It will take at least 2023 before the deal goes into effect.

The agreement was announced by the Paris-based Economic Cooperation and Development Organization. The deal covers a portion of the profits of the world’s largest companies taxed in countries that do business online, but may not have a physical balance.

French Finance Minister Bruno Le Myre called it “the most important international tax treaty of the century.”

In personal agreements, France-led countries have already begun levying internet taxes targeting US technology companies such as Amazon, Google and Facebook. The United States considers this unfair trade practice. Under the new agreement, other countries will agree to withdraw these taxes in support of the international minimum tax.

Former US President Donald Trump has imposed a tax on French goods after the French said they would tax American technology companies. France commended the Biden administration for its efforts to reach an international agreement.

“Bound Giants They have to pay fair shares wherever they do business, ”Biden said Middle A business has to pay more taxes than any online company because it is physically located in the country where it operates.

U.S. Treasury Secretary Janet Yellen called it a “historic day.”

Yellen said in a statement that the United States has been engaged in “self-defeating” international tax competition for decades. “The United States is lowering the corporate tax rate,” he said, “to see other countries lower their rates.” Answer. She said it turned out to be a race down.

Yellen said lower rates carry money from project construction, education and epidemiological initiatives.

Sand Carwin is a tax consultant and former treasury officer at KPMG, a professional service company. He said the deal was largely over and was in line with the US proposal. He said it was important for states to do their tax contracts online.

Under the agreement, states can tax up to 15% on the profits of their foreign companies. This eliminates the reason for changing profits because they will be taxed at home. The Organization for Economic Co-operation and Development estimates that these tax evasion practices cost between $ 100 billion and $ 240 billion each year.

Not all of the 139 countries that joined the talks signed the agreement. Irish Finance Minister Basel Donohue said there was public support for the deal, but at least 15 percent could not agree. He said the country’s 12.5% ​​rate was a “reasonable rate”. Ireland said it would continue discussions in the future.

Two of the signatories to the conference were Bermuda and the Cayman Islands Tax havensThe major economic powers are China and India.

Further negotiations are expected by the world’s 20 largest economies known as the G-20. G20 finance ministers meet in Venice next week. Countries will be required to sign the agreement Multifaceted Agreement, at least the corporate tax can be accepted by each state through its national law Arbitrarily, at your own discretion.

Tax experts say the voluntary system will work if countries with headquarters in many multinational corporations, such as the United States and Europe, agree. This will send the message that profits available anywhere in the country will be taxed at a minimum.

In the United States, Biden proposed a minimum rate of 21% on foreign income to prevent large American companies from changing profits. In the United States, Biden’s tax plan must first pass Congress, where Democrats have a small majority.

I am Gregory Statell.

David McHugh broke the news to the Associated Press. Gregory Statell adapted it for VOA English learning. Susan Shand was the teacher.

_______________________________________________________________

The words of this story

At least – Description As little or as little as possible based on size or degree

Giant – NM A person or thing that is great, powerful or successful

Middle – Description In the middle of a range of possible sizes or sizes

Answer – NM Said or wrote something in response to something

Line heaven – NM A place where people live and businesses go to work to avoid paying high taxes

Multifaceted– Description Add more than two groups or two countries

Volunteer – Description Finished or delivered as you wish, because you have to: Choose or give