The Organisation for Economic Cooperation and Development says it is working to overhaul worldwide tax laws that the organization says are no longer suitable in today’s world of multinational businesses, such as Apple, Google, and other tech firms.
Reuters reports the Organisation for Economic Cooperation and Development (OECD) has revealed its initial proposals that will allow individual governments to tax multinational companies more.
While the proposal includes bricks and mortar retailers, it also hits Apple, Facebook, Google, and other tech firms that earn income in these territories.
“The current system is under stress and will not survive if we don’t remove the tensions,” said Pascal Saint-Amans, OECD head of tax policy.
Saint-Amans said that the planned overhaul would see an impact equivalent to a few percentage points of corporate income tax.
The companies that will be affected are defined as companies that operate across borders and have a total revenue of over $821 million. The companies do not have to have a physical presence in the country, but do have a “sustained and significant” customer base there.
Finance ministers are set to discuss the OECD proposals during a meeting in Washington next week. Over 130 countries have already agreed in principle for the need for reform. The OECD plans to present a more detailed outline agreement in January 2020.
The OECD proposal is just one of many efforts to address the rise of firms such as big tech firms that earn large amounts of money in countries that charge low tax rates. ::COUGH!:: Apple in Ireland! ::COUGH!::
The Reuters reports says the OECD plans would affect these low-tax regions, basically ending their tax haven status.