Biden's 15% global minimum tax supported by 130 countries, territories
A 2-pronged global tax revamp will be finalized in October
Biden, G-7 world leaders find common ground on global minimum tax
Biden and G-7 summit world leaders reach agreement on global minimum tax. FOX Business' Connell McShane with the latest.
The push to establish a global minimum tax – backed by President Biden – has support from 130 countries and territories, according to the Organization for Cooperation and Economic Development.
These countries and jurisdictions represent more than 90% of global GDP.
The "two-pillar" tax proposal includes a 15% global minimum tax and reallocates taxing rights on large multinational companies to the markets where they do business and earn profits regardless of whether they have a physical presence there.
"This package does not eliminate tax competition, as it should not, but it does set multilaterally agreed limitations on it," OECD Secretary-General Mathias Cormann said in a statement.
The goal is to finalize the plan by October and implement it in 2023.
The OECD said the measures will help raise revenue for countries seeking to repair their budgets in the wake of the financial destruction wrought by the COVID-19 pandemic.
BIDEN GREETS G-7 WITH GLOBAL MINIMUM TAX PUSH IN HAND
As previously reported by FOX Business, Biden endorsed the global minimum tax with the Group of 7 finance ministers during his trip to Europe last month.
A global minimum tax, which applies only to a country’s overseas profits, seeks to prevent the world’s largest companies from dodging tax obligations by offshoring.
If a company is paying a tax rate lower than the global minimum in a foreign country, it would owe the difference in the country where it is headquartered. The policy would also potentially affect some major companies by requiring that they pay taxes in the countries where their good and services are sold, and not just where they are physically present.
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The White House has said the tax paves the way for the removal of digital service taxes, which would be replaced by taxing rights in the countries where the largest multinational companies operate.
The global minimum tax will need congressional approval before it is implemented in the U.S.