The global minimum tax (GMT) agreement signed by more than 136 countries late last year marks a sea change in the taxation of international businesses. And, contrary to headlines, it’s not just the big fish of the corporate world who need be concerned.
Although the deal ostensibly affects only larger companies, many business leaders don’t realize that the trickle-down impact is likely to be much broader and more costly than they assume. Any firm that thinks it’s small enough to avoid getting caught up in the mounting international push for deeper information reporting should think again.
This agreement is a culmination of years of efforts by governments to address loopholes and sophisticated tax planning strategies that allowed multinationals to shift profits to low-tax countries and led to intense tax competition between countries.
