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Global tax deal by 136 countries to impose minimum corporate tax rate of 15% in 2023: OECD Updated: 2021-10-10 08:53:34 KST

The OECD said Friday that more than 130 countries have now signed up to a new agreement on a minimum corporate tax that'll take effect in 2023.
The aim is to tax companies, like the big tech giants, in the countries where they make their money, and to discourage them from headquartering in certain countries to avoid paying tax.
Some major South Korean companies like Samsung Electronics and SK hynix could face a more complicated tax situation under the deal, but it's unlikely that they'll have to pay significantly more because of the nature of their business in manufacturing.
Bae Eun-ji reports.
The OECD announced that a total of 136 countries has agreed to enforce a corporate tax rate of at least 15-percent, and require companies to pay taxes in the countries where they do business.
It said the deal includes all members of the OECD, G20, and EU.
The minimum tax rate would apply to overseas profits of global firms with sales of more than 750-million euros, or about 868 million U.S. dollars.
The Paris-based organization said this would have countries collect around 150-billion U.S. dollars in new revenues annually.
The deal also shifts the right to tax companies from their home countries to nations where they earn significant profits, even without a physical presence there.
It allows countries where revenues are earned to tax 25-percent of the multinationals' "excess profit," defined as profits above 10-percent of their revenue.
The measure applies to firms with profit margins above 10-percent, and global sales exceeding 20 billion euros, or around 23-billion U.S. dollars.
This will include Samsung Electronics and SK hynix based in South Korea.
Both Samsung and SK said that they are "keeping a close eye" on the deal's implementation.
Industry watchers in Korea say that it's unlikely the two companies will be severely affected, because even though they will have to pay tax in more countries instead of just their home country, the total amount of tax will not change much.
But there will be more costs in getting the taxes done, as they have to report and pay a new form of tax once the deal is implemented.
Friday's deal follows concerns that large multinationals are re-routing their profits through low tax jurisdictions to cut their bills.
A statement released by the OECD said the affected companies include American digital giants such as Google, Amazon, and Facebook.
U.S. Treasury Secretary Janet Yellen said on Twitter that the deal represents a (quote) "once-in-a-generation accomplishment" for economic diplomacy.
Bae Eun-ji, Arirang News.
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