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OECD warns of tax talks threat to global economy

12 Oct 2020 04:16 PM

The OECD warned on Monday that the global economy could lose more than 1% of GDP if international negotiations over cross-border tax standards collapse.

Nearly 140 countries agreed on Friday to continue negotiations until mid-2021, with uncertainty around the US presidential election making a quick agreement unlikely.

Public pressure is mounting on large multinationals to pay their share under international tax rules as the COVID-19 pandemic strains domestic budgets.

OECD figures suggest that an agreement would lead to an increase in annual corporate income taxes by between 1.9% an 3.2% - or $50 billion to $80 billion.

This could stretch to $100 billion if a current minimum US tax on overseas profits is included. This makes up as much as 4% of global corporate income tax.

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