SEAMLESS

Most of the world's nations have signed up to a historic deal to ensure big companies pay a fairer share of tax.

Ireland has dropped its low-tax policy after months of wrangling over the fine print of an Organisation for Economic Co-operation and Development ( OECD ) agreement to operate a 15 % minimum tax rate in more than 130 countries.

Holdouts from previous negotiating rounds, including Ireland, Hungary and Estonia, agreed to the latest plans, meaning that all 38 OECD member countries and the G20 group of the world's most advanced economies would be part of the reforms.

However, Kenya, Nigeria, Pakistan and Sri Lanka have not yet joined the agreement.

The Irish government will support a deal to set a global minimum corporation tax rate for large firms.

Although stating the plan would not eliminate tax competition, the agreement sets rules limiting a race to the bottom on tax.

The OECD said it would collect an extra $ 150bn for governments around the world each year.

Some of the world's biggest multinationals have their European headquarters in Ireland, having been lured there in part by its low corporation tax rate of 12.5 %.

Dublin agreed to join after receiving assurances from the EU that the rate would not be increased further down the line.

however, tax floor will also only apply to the biggest advantage for global corporates to locate in ireland was a tax loophole known as the "double irish" that was removed after a global crackdown in 2015.

"We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business," he said.

“ it is a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalised and globalised world economy," said oecd secretary-general mathias cormann.

"we must now work swiftly and diligently to ensure the effective implementation of this major reform."

The Organisation for Economic Cooperation and Development ( OECD ), an intergovernmental organisation, has led talks on a minimum rate for a decade.

Ireland's Finance Minister Pascal Donohoe said that backing the deal was "a serious and complex decision."

More than 100 countries supported the initial OECD proposals when they were announced in July.

it follows concern that multinational companies to shift their profits to places where the tax rate is lower.

ireland's department of finance has estimated it could lose between €800m and €2bn a year.

G20 leaders are then expected to sign off on the deal when they meet in Rome in late October.

And the country has used low headline corporate tax rates for almost two decades to further coax businesses to locate operations on its shores.

Some 136 countries have agreed to enforce a corporate tax rate of at least 15 %, as well a fairer system of taxing profits where they are earned.

UK Chancellor Rishi Sunak said the deal would "upgrade the global tax system for the modern age".

In the past, countries would frequently compete with one another to offer an attractive deal to multinationals.

The pact also resolves a spat between the US and countries such as the UK and France, which had threatened a digital tax on big mainly American tech firms.

Stay up to date with our posts

Seamless Daily is an innovative news platform that is updated 24/7 to help you keep up to date with all the current events around the globe.

Our team of professional editors as well as our state-of-the-art artificial intelligence platforms ensure that our curation is accurate, fact-checked, and trustworthy.

Click here to subscribe

Read more

Sarah Everard: Baroness Louise Casey to lead independent review of Metropolitan Police

'Murdered' boy, cried 'no one loves me and no one's going to feed me today' as he was 'tortured'

Sausage wars victory: EU surrenders over British bangers sold in Northern Ireland