Saudi Press

Saudi Arabia and the world
Friday, Apr 26, 2024

‘Historic’ global tax deal on multinationals delayed until 2024

‘Historic’ global tax deal on multinationals delayed until 2024

Some doubt the OECD-brokered agreement, which would levy more tax on the world’s largest firms, will ever be implemented
An international deal that would force the world’s biggest multinational companies to pay a fair share of tax has been delayed until 2024 amid fresh wrangling over the painstakingly negotiated agreement.

Mathias Cormann, the secretary-general of the Organisation for Economic Co-operation and Development (OECD), told the World Economic Forum in Davos, Switzerland, that there were “difficult discussions” taking place that meant the deal could not come into force in 2023, as previously hoped.

Cormann said he remained confident an agreement would eventually be implemented to let countries levy more tax on the world’s largest firms based on the sales generated within their borders.

But the US billionaire investor, David Rubenstein, co-chairman of the Carlyle group, said he doubted whether the OECD-brokered deal would ever happen. “Global tax deals sound great but getting them implemented is very difficult,” he told a Davos session before Cormann’s comments.

The deal – which Cormann called “historic and very important” – has two parts. Pillar 1 involves the reallocation of some profits from major multinationals such as US tech companies to countries where they made their sales, while Pillar 2 brings in a global minimum corporation tax rate of 15%.

Cormann said there were “still some difficult discussions under way with relation to the technical aspects” of Pillar 1.

“We deliberately set a very ambitious timeline for implementation to keep the pressure on and we think that has helped keep the momentum going.

“But I suspect it is probably most likely that we will end up with a practical implementation from 2024 onwards.”

Pillar 1 is facing opposition in the US Congress from Republican senators, and analysts have suggested the deal could fall if the Democrats lose control of the House of Representatives in November’s midterm elections. Rubenstein said he thought the agreement would not happen even if the Democrats keep control of the House.

Cormann refused to comment on political issues, but said the OECD deal would be better for US multinational companies than a proliferation of different tax regimes overseas if countries tried to individually make them pay a fair share.

He was also “very encouraged by the progress” on Pillar 2, and hopeful that EU members will agree to back it. Pillar 1 requires an international treaty to be agreed, while Pillar 2 is implemented through domestic legislation.

Cormann said that once there was a critical mass of countries imposing a minimum level of corporate tax on profits generated in their jurisdictions, it would be very hard for other countries not to follow.

He explained: “Essentially you leave money on the table for other countries to collect, if you don’t align yourself to that global standard.”

James Murray MP, Labour’s shadow financial secretary to the Treasury, said news of the delaywas “incredibly disappointing”.

“Without this deal being in place, we risk missing out on the chance to bring billions of pounds currently lost to large multinationals’ tax dodging back to Britain,” he added.

“The Chancellor needs to use his position to urgently get people back round the negotiating table, and do all he can to make sure this landmark deal is delivered.”

Poland has been holding back support for the EU’s directive to implement Pillar 2, but French finance minister, Bruno Le Maire, said on Tuesday he was confident an agreement would be reached.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Reports in Gaza: 5 dead from the impact of aid packages dropped by the USA
Apple warns against drying iPhones with rice
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
The U.S. vetoed a U.N. Security Council resolution calling for a temporary ceasefire in Gaza, instead proposing its own six-week ceasefire plan contingent upon the release of all hostages held by Hamas
Prince William Urges End to Gaza Conflict
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
EU Calls for Immediate Ceasefire in Gaza Conflict
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
Saudi Arabia Introduces Terms for 30-Year Income Tax Exemption for Multinational Companies
Saudi FM: Establishing Palestinian state is only pathway for Mideast stability
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Elon Musk's Starlink Gets License For Israel, Parts Of Gaza
Influencers Exploit X Platform for Profit Amidst Israel-Gaza Conflict
PM Modi Announces Opening Of New CBSE Office In Dubai
International Criminal Court's Chief "Deeply Concerned" By Rafah Bombing
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Indian female military officers commend Saudi Arabia's progress and women's empowerment
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Israel Utilizes AI Military Technology in Gaza Conflict
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
China Warns Iran to Halt Houthi Attacks or Damage Trade Ties
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Iran-backed hackers interrupt UAE TV streaming services with deepfake news
Facebook and Instagram Ban Iran's Supreme Leader
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
U.S. Secretary of State Blinken: The Israelis underwent dehumanization on 7.10, this does not give them the right to do this to others.
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
UK Bans Misleading "Zero Emissions" Claims for Electric Cars
Gaza's Teen Inventor Sparks Light in Displacement
Netanyahu Rejects Ceasefire Proposal, Insists On Total Victory Over Hamas
Guterres appoints independent UNRWA review panel
Private Sector Employment Hits Record High with Over 11 Million Employees in January
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
ZATCA Cautions Against Scammer Schemes
INTRA Defense Technologies inaugurates drone factory in Riyadh
×