Global Minimum Tax

About Global Minimum Tax

The global minimum tax, agreed by over 140 countries in October 2021, sets a 15 percent minimum effective tax rate on the profits of multinational companies with revenue over 750 million euros. The tax is part of the OECD BEPS 2.0 project. The goal is to end the race to the bottom in corporate taxation. Under the rules, if a multinational pays less than 15 percent in any jurisdiction, its home country collects the difference. The European Union implemented the global minimum tax through a directive effective January 2024. The UK, Japan, South Korea, Canada, and other countries have implemented it. The US has similar rules called GILTI but has not fully aligned with the global standard. The global minimum tax represents the most significant international tax reform in a century.