Global Minimum Tax for Multinationals Implemented, Aiming to Generate Up to €200 Billion

The much-anticipated global minimum tax for large multinational corporations has come into effect, marking a significant milestone in cross-border tax reforms. Commencing on Monday, the reforms seek to generate an additional €200 billion ($220 billion) in annual revenue.

Nearly three years after 140 countries, including Ireland, reached an agreement to address loopholes in the international tax system, major economies have begun applying an effective tax rate of at least 15% on corporate profits.

Guided by the Organisation for Economic Co-operation and Development (OECD), these reforms consist of interlocking rules. If a multinational's profits are taxed below the 15% rate in one country, other nations can impose a supplementary levy. The OECD estimates that this will boost global annual tax revenue by up to 9%, totaling €200 billion ($220 billion). V0 V0 V0 V0 V0 V0 V0 V0 V0 V0 V0

Jason Ward, principal analyst at the Centre for International Corporate Tax Accountability and Research, praised the "super smart design" of the reform, anticipating a reduction in the use of tax havens by companies and countries alike. This, he believes, will put a halt to the race to the bottom in terms of tax rates.