OECD: Expected Annual Increase of $150 Billion in Tax Revenues

Minister of Treasury and Finance of Türkiye Mehmet Simsek had stated, “Regulation is inevitable. Otherwise, taxes not collected by our country will be collected by another country.”

Following a new global tax agreement signed by 134 countries, including Türkiye, approximately three years after its inception in 2021, many advanced economies have started implementing a minimum corporate tax beginning this year.

The agreement, prepared at the proposal of the Organisation for Economic Co-operation and Development (OECD), stipulates that multinational corporations must pay at least a 15% tax on their corporate profits.

According to OECD calculations, the tax reform is expected to increase global tax revenues by 9% annually, amounting to a $150 billion increase in revenues.

Countries and regions such as the European Union (EU), Australia, South Korea, Japan, Canada, and Norway have implemented the regulation as of January 1st this year.

In these countries, the minimum corporate tax is levied on multinational corporations with annual revenues exceeding 750 million euros.

The implementation aims to prevent billions of dollars in profits from being shielded in tax havens.

Countries known as tax havens, such as Ireland, Luxembourg, and Switzerland, have also joined this agreement.

While the United States is a signatory to the agreement, it has not yet implemented the minimum corporate tax.

According to the agreement, the implementation of the tax rate by countries encourages others to follow suit. This is because taxes not collected can be added to the tax revenues of the countries where companies’ main operations are based.