A global deal on a minimum corporate tax rate of 15% was reached last week by the OECD and signed by 136 countries worldwide.
The agreement goes into effect in 2023 and is aimed at pulling the rug from under the feet of tax havens, ending the race between countries to offer lower tax rates, and exacting a "real tax" rate from multinational companies.
Tadmor Levy & Co. partner and Tax Department head Adv. Boaz Feinberg said, 'The efforts of OECD countries to set unified rules for international taxation, in other words tax on economic activities taking place in multiple countries has led to an intensification in competition between countries to reduce their tax rates in order to attract multinational companies. Consequently, there has in recent years been a consistent and substantial fall in corporate tax rates in OECD countries. The US succeeded in persuading the G20 countries to compel all multinational corporations to pay to their parent country a minimum corporate tax of 15%. Those who have promoted the measure believe that this step will substantially reduce the weight of tax considerations when multinational companies are choosing the location of their activities."