The Organisation for Economic Cooperation and Development, or OECD, has reportedly detailed the final guidance for governments on bringing the new global minimum corporate tax into their law books.
What Happened: The reform intends to update decades-old rules on cross-border tax where technology giants like Apple Inc. AAPL and Alphabet Inc.’s GOOG GOOGL Google can book profits in countries having low taxes such as Ireland, reported Reuters.
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OECD anticipates this will yield an additional $220 billion in tax income globally, the report said. Its final guidance looks to clarify details so that governments implement tax codes in a consistent and coordinated manner to reduce compliance costs for companies and possibilities of conflicts, it said.
“This will include listening to stakeholders on how the operation of the rules can be further refined to reduce compliance costs and achieve better tax certainty for business and how we can optimize the information to be reported in the GloBE Information Return, while also developing a robust and transparent peer review process and expanding our capacity building efforts," said Grace Perez-Navarro, director of the OECD Centre for Tax Policy and Administration.
Treasury Statement: The U.S. Treasury Department stated the guidance would provide clarity, while protecting tax incentives such as the green tax credits contained in the Inflation Reduction Act, according to the Reuters report.
"The continued progress in implementing the global minimum tax represents another step in leveling the playing field for U.S. businesses," said Lily Batchelder, assistant secretary of the Treasury for Tax Policy.
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