Global minimum corporate tax to reshape investments: OECD

The implementation of a global minimum corporate tax this year, first agreed in 2021 among 140 countries, is set to dramatically alter multinational corporations’ foreign investment strategies, according to an updated OECD impact study. With 36 countries already enacting laws for a 15% minimum corporate tax rate, and more expected to follow, the new policy aims to reduce profit shifting to low-tax countries like Ireland and offshore havens. The OECD anticipates that the average tax rate disparity between havens and other nations will be halved, from 14 to seven percentage points. This shift is likely to make factors such as workforce quality and infrastructure more significant in investment decisions, rather than tax advantages. The global minimum applies to companies with over USD820m in annual turnover.