Global Tax Rules & MNC Tax Rates
The G7 countries have reached a landmark agreement on corporate tax reform, agreeing to proposals which ensure the largest multinationals pay more tax where they operate, regardless of location of their headquarters (“Pillar One”), and a minimum tax rate of 15% for multinationals (“Pillar Two”). The accord will have to win the support of the G20 nations in Venice in July, before wider global negotiations with 139 countries at the OECD. The accord will help end the “race to the bottom”, in which countries have slashed corporate tax rates and provided exemptions to attract big MNCs. The average statutory rate has fallen from around 40% in 1980 to 24% in 2020.