Not all members of the G20 group of leading economies were on board with a global tax overhaul agreed by 136 countries until shortly before it was concluded on Friday, a German government source said on Monday, according to Reuters.
Getting all European member states involved to agree to the deal was crucial to ensuring it can be implemented across the bloc, the source said, adding: “This is a considerable step forward.”
The deal aims to end a four-decade-long “race to the bottom” by setting a floor for countries that have sought to attract investment and jobs by taxing multinational companies lightly, effectively allowing them to shop around for low tax rates.
A group of 136 countries on Friday set a minimum global tax rate of 15% for big companies and sought to make it harder for them to avoid taxation in a landmark deal that U.S. President Joe Biden said levelled the playing field.
The 15% floor agreed to is, however, well below a corporate tax rate which averages around 23.5% in industrialised countries.
The deal aims to stop large firms booking profits in low-tax countries such as Ireland regardless of where their clients are, an issue that has become ever more pressing with the growth of ‘Big Tech’ giants that can easily do business across borders.