Big businesses will finally be forced to pay their far share of tax as nations strike historic deal
‘Landmark Plan’: Chancellor Rishi Sunak has welcomed the international agreement on corporation tax
A historic international agreement which will force big businesses to pay their fair share of tax is set to go ahead.
The deal, which was agreed in principle in June, was shored up last night after Ireland, Estonia and Hungary agreed to sign up. It will set a minimum corporate tax rate of 15 per cent, and let governments tax a greater share of profits from foreign businesses in the country where they are made.
Chancellor Rishi Sunak, who chaired the G7 talks on the deal over the summer, hailed the ‘landmark plan’. UK corporation tax is currently set at 19 per cent but is due to rise to 25 per cent.
He said: ‘We now have a clear path to a fairer tax system, where large global players pay their fair share wherever they do business.’
The agreement aims to end a four-decade-long ‘race to the bottom’ by governments that have sought to attract investment and jobs by taxing multinational firms only lightly and allowing them to shop around for low tax rates.
The Organisation for Economic Cooperation and Development thinks the new rate will see countries collect around £110bn in revenues annually.