OECD countries have taken a new decision on international tax arrangements. According to this decision, technology companies that carry their headquarters to countries where lower taxes are applied will pay an additional 15 percent tax to countries that are actually centralized. The amount of tax to be collected through this arrangement will be around $150 billion annually.
The G20 summit in Rome, Italy, marked a decision that will shake up the technology sector. The Organisation for Economic Co-operation and Development(OECD)said it would review international tax rules and impose an additional 15 percent tax on companies that relocate their headquarters to other countries to pay lower taxes. This is likely to cause headaches, especially for companies that prefer Ireland.
According to the information obtained, the new OECD regulation aims to reorganize corporate tax according to the requirements of the digital age. In this way, it is aimed to prevent companies from going to tax avoidance. In fact, the arrangement imposes an extra tax on companies going to the central transport route. That’s why all the giants, from Google to Facebook, seem to be rethinking their headquarters structures.
The arrangement was created to cover the world’s largest tech companies
The OECD’s new corporate tax arrangement is a step towards the world’s largest technologies. Under the arrangement, a company will have to declare annual revenues of at least 750m euros to be included in the new corporate tax application. Under the arrangement, these companies will have to pay 15 percent of their income to countries that actually have headquarters, in addition to the existing taxes they pay. In this case, Google, which also has a headquarters in Ireland, will pay an extra 15 percent tax to the United States.
$150 billion in taxes will be collected
The OECD’s statements also gave an estimate of what this arrangement would cost. That estimate estimates the extra tax to be collected from tech giants will be around $150 billion annually. This, as you can imagine, will benefit the United States the most. The statements already made are a clear indication of this. U.S. Treasury Secretary Janet Yellensaid the deal was “historic,” which would prevent a further reduction in corporate taxes collected by the United States each year.