At the OECD’s Inclusive Framework Conference on July 1, 130 countries and jurisdictions (accounting for more than 90% of global GDP) joined the new framework of international tax reform, supporting the G7’s global minimum tax rate initiative to ensure that multinational companies pay fair taxes no matter where they operate. The new minimum tax rate, at least 15%, is applicable to companies whose turnover exceeds the threshold of 750 million euros (891 million US dollars), and only the shipping industry is tax-free. According to the OECD, the new tax system will increase global government finances by approximately 150 billion U.S. dollars (125 billion euros).

The G7 agreed to this minimum tax rate in June, and now the broader agreement will be submitted to the G20 for political approval at a meeting in Venice next week. The minimum corporate tax rate does not require countries to set the tax rate at the agreed minimum tax rate, but gives other countries the right to impose a minimum tax rate on corporate income from countries with lower tax rates. A statement from the countries supporting the agreement stated that the technical details will be agreed before October so that the new rules can be implemented by 2023.