OECD fixes minimum tax of 15% on MNCs from 2023

OECD fixes minimum tax of 15% on MNCs from 2023

Multinational corporations will be subject to a minimum tax of 15% from 2023, in a major reform of the international tax system finalised by the OECD on Friday.

The framework, backed by 136 countries, including India, seeks to ensure a fair share of taxes for countries where multinationals and global digital companies such as Netflix, Google earn revenues from.

"The landmark deal, agreed by 136 countries and jurisdictions representing more than 90% of global GDP, will also reallocate more than $125 billion of profits from around 100 of the world’s largest and most profitable MNEs to countries worldwide, ensuring that these firms pay a fair share of tax wherever they operate and generate profits, " the OECD said in a statement.

The two-pillar solution will be delivered to the G20 Finance Ministers meeting in Washington DC on 13 October, then to the G20 Leaders Summit in Rome at the end of the month.

Countries are aiming to sign a multilateral convention during 2022, with effective implementation in 2023, it said.