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Digital tax. Revolutionary agreement of 136 countries

Transnational corporations from 2023 will have to pay corporate tax at a rate of at least 15%, regardless of the tax level in the jurisdictions in which the companies are registered.

Flat rate agreement & nbsp; minimum 15 corporate tax percent concluded 136 states, which account for more than 90 percent of world GDP. The agreement aims to combat tax evasion by international corporations. & Nbsp;

The initiative was also signed by those countries that were initially opposed to tax reform, for example, Hungary, Ireland and Estonia, which were previously convenient hubs for IT giants. & nbsp; Korrespondent.net & nbsp; tells the details .

The Most Important Tax Agreement

136 countries, including Ukraine, which account for more than 90 percent of the global economy, have agreed that the global minimum tax rate for large corporations will be at least 15 percent.

About this & nbsp; reported & nbsp; to the Organization for Economic Co-operation and Development on October 8th, which became the platform for this global initiative.

The idea is that, first, corporations pay taxes in the same country where they made their profits. Secondly, in order to avoid the emergence of “tax havens”, a minimum requirement for all countries is introduced.

The project, which has been working on for several years, is now called a timely opportunity to provide additional revenues to the state budgets for the recovery of economies after the coronavirus crisis. & nbsp;

Corporate tax will be applied to companies with revenues of more than 750 million euros. The agreement will raise $ 150 billion annually worldwide and will also redistribute more than $ 125 billion in revenues of the 100 largest international corporations.

In addition, the new tax rules will affect companies with global sales in excess of 20 billion euros. If a corporation receives more than ten percent of the profit margin, it will be forced to redistribute 25 percent of the excess to the countries where it sells its services and goods.

The agreement could deprive tech giants like Google, Apple, Facebook and other corporations of the ability to evade taxes through low-tax jurisdictions.

“The agreement will make our international tax mechanisms fairer and more efficient. This is a major victory for an effective and balanced multilateral approach,” said OECD Secretary General Matthias Kormann.

The initiative was signed by those countries that were initially against the tax reform, for example, Hungary, Ireland and Estonia. It was possible to reach an agreement with them thanks to concessions, for example, Hungary extended the transition period by ten years. This will allow the country to temporarily maintain the rate of nine percent.

The new tax rules are due to enter into force in 2023. & nbsp; The initiative is expected to be finally approved at a meeting of the G20 leaders in Rome in late October, followed by changes to national legislation.

In France, the agreement was called “the most important in the field of taxes in a century”, and in Germany announced “colossal progress in the field of international corporate taxation.”

“For four years we have worked for the fair taxation of international companies and digital giants,” said French President Emmanuel Macron, calling & nbsp; the introduction of a minimum 15 percent income tax for multinational companies historic.

The United States came up with the idea of ​​introducing a single minimum tax on transnational corporations. The authorities are not happy with the fact that companies are registered in low-tax jurisdictions like Ireland and the British Virgin Islands in order to pay much less fees.

As a result, all states had to compete for corporations to pay taxes exactly about them, and, as a result, reduce rates. A minimum rate of 15 percent should end this – most developed and developing countries agree.

At the same time, experts note that large rich countries benefit most from the tax revolution, whose citizens consume a lot of electronic services, money from which previously accumulated in low-tax jurisdictions.

In early June, agreements on the introduction of a digital tax reached the G7 countries after years of discussion. Then the British Finance Minister Rishi Sunak called the agreement & nbsp; historical and revolutionary . < / p>

Many countries decided not to wait for the end of many years of discussion and themselves introduced a digital tax. & nbsp; It is already in force in France, Spain, Italy, Great Britain, Austria, Turkey. & nbsp;

June 28, President of Ukraine Volodymyr & nbsp; Zelensky & nbsp; signed the law , according to which foreign global technology giants such as Apple, Google, Microsoft, Netflix and others will pay 20 percent VAT (value added tax) in Ukraine. & nbsp;

Under the new law & nbsp; foreign companies that supply Ukraine with electronic services will be required to register as VAT payers using a simplified procedure through a special electronic service, if the total amount from the implementation of the relevant transactions exceeds one million hryvnia per year.

News from & nbsp; Correspondent.net