AS many as 130 countries, including India and China, accounting for 90% of global GDP finally agreed to back the G7 approved proposal for 15% as global minimum corporate tax. The deal was brokered by the OECD at Paris yesterday. And a formal agreement is to be signed to bring it into force from October, 2021.

Interestingly, several hitherto known tax havens such as Cayman Islands, British Virgin Islands and Bermuda also supported the new corporate tax regime for the world.

Strangely, nine countries which disagreed to the proposal include Sri Lanka and Kenya. The predictable ones were Ireland, Nigeria, Saint Vincent, Hungary, Turkey and Grenadines. Ireland has at present 12.5% tax rate and has attracted huge investments from American corporates.

The new threshold for applying the new tax rate is USD 889 mn turnover or Euro 750 mn with shipping industry as the only exemption.