Egypt’s Minister of Finance Mohamed Maait welcomed the historic agreement on global corporate tax rate, saying that it will contribute to addressing the tax challenges arising from the digital transformation.
The Organization for Economic Cooperation and Development (OECD) last Friday announced that developed nations agreed to a global minimum corporate tax rate of 15%.
“The landmark deal, agreed by 136 countries and jurisdictions representing more than 90% of global GDP, will also reallocate more than $125bn of profits from around 100 of the world’s largest and most profitable MNEs to countries worldwide, ensuring that these firms pay a fair share of tax wherever they operate and generate profits,” OECD said in a statement.
Maait said that Egypt strongly participated in the negotiations of this agreement, which was drafted in a way that largely meets the Egyptian requirements to ensure justice, preserve the rights of the Egyptian people, and instill economic stability.
He added that the world is redeveloping international tax rules to coincide with the era of technology. The technological revolution that the world witnessed in the past decades necessarily required a parallel revolution in tax rules to meet the requirements of justice and preserve the resources of countries and their tax rights.
The minister pointed out that this agreement, whose first cornerstone was laid on 1 July 2021, was a historic win-win deal for all parties. It represented a new start for international taxes, contributing to preserving the tax rights of the peoples.
Moreover, the agreement is expected to generate tax revenues of about $150bn annually worldwide. This ensures the stability of the international tax system and increases tax certainty for companies as well as tax authorities.
Ramy Youssef, adviser to the Minister of Finance for tax policies, said that this agreement was one of the gains of globalization and technological transformation. It preserves Egypt’s rights in tax revenues on the activity of multinational companies in Egypt, and highlights the efforts of the Ministry of Finance in combating profit transfers and tax erosion. This international agreement is expected to contribute to enhancing Egypt’s tax revenues from the activity of international companies operating in the digital economy.
