TAXING RIGHTS AND GLOBAL MINIMUM TAX RATE – AN END TO PROFIT SHIFTING
INTRODUCTION Recently, the top economic officials from the world’s advanced economies reached a groundbreaking agreement to overhaul international tax laws. This has led to the unveiling of a broad agreement that aims to stop large multinational companies from seeking out tax havens and forcing them to pay more of their incomes to governments. The G7 economies which comprise of Britain, Canada, France, Germany, Italy, Japan, and the United States of America, will work out modalities for the implementation of the new tax system. The Finance Ministers from the Group of Seven (G7) rich nations reached a landmark accord by backing the creation of a global minimum corporate tax rate of at least 15%, an agreement that could then form the basis of a worldwide deal. Understandably, this will put an end to what U.S. Treasury Secretary Janet Yellen has called a “30-year race to the bottom on corporate tax rates” as countries compete to lure multinationals. WHY GLOBAL MINIMUM TAX? Major eco...