Why global tax talks are back on the agenda

International efforts to reform business taxation have been given new impetus by the new US administration.

Under President Joe Biden and his Treasury Secretary, Janet Yellen, the US has moved on two key areas where the negotiations were stuck. One is having a minimum tax rate for corporate profits. The other is some exemptions on digital services taxes that the US had previously sought. The goal of a global accord by mid-2021 now appears more credible.

The negotiations, coordinated through the Organisation for Economic Co-operation and Development (OECD), are building on previous work to reform corporate taxation. There is a long history of international agreements on taxation. In the past, the aim tended to be to prevent “double taxation”, the same income, personal or business, being taxed in twice in different jurisdictions.

More recent negotiations, including those in the OECD, have often had the opposite aim: the prevention of what has been called “double non-taxation”.

-BBC

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