AFP, Paris :
Some 130 countries reached a historic deal Thursday that would see massive multinational firms pay their fair share of taxes.
But the deal won’t be finalised until October, with some tough work ahead to bring in recalcitrant countries.
· How was the deal reached? –
In order to get on board the developed countries who have seen their tax revenue leak away, as well as sceptical emerging nations and countries which have benefited from ultra-low tax rates, a number of compromises were necessary.
While the deal foresees an effective minimum 15 percent tax rate-that is to say that the amount actually levied and paid-there will still be a few loopholes to reduce that.
Countries will still be able to offer incentives to encourage companies to set up production facilities. Developing nations will still be able to benefit from breaks foreseen in bilateral treaties.
And the text’s provisions concerning a redistribution of profits to countries where companies do most of their business will only apply to the top hundred or so multinationals.
But to assuage developing countries it was agreed that after seven years the number of companies subject to this provision will grow.
