The landmark agreement, brokered by the Organization for Economic Cooperation and Development, set a minimum global corporate tax of 15%. The idea was to stop multinational corporations, among them Apple and Nike, from using accounting and legal maneuvers to shift earnings to low- or no-tax havens.
Over the summer, the OECD agreed to delay for at least a year — until 2026 — a provision that would have let foreign countries impose additional taxes on U.S. multinational companies that failed to pay at least a 15% rate on their overseas earnings. It also “risks increasing inequality by boosting the after-tax profits of shareholders, who tend to be towards the top of the income distribution,” it said.
Last week, U.S. Treasury Secretary Janet Yellen said the minimum-tax agreement wouldn’t be finalized until 2024. Despite its criticisms of what has happened to the minimum tax, the EU Tax Observatory praised a separate effort to stop the wealthy from dodging taxes. In 2017, tax authorities around the world began exchanging taxpayer information from financial institutions to better enforce tax laws. The results, essentially ending bank secrecy, have been dramatic, the Tax Observatory found.