'Deal to force multinational companies to pay 15% minimum tax is marred by loopholes"

Idea was to stop multinational corporations like Apple Nike, from using accounting and legal maneuvers to shift earnings to lowor no-tax havens

An ambitious 2021 agreement by more than 140 countries and territories to weed out tax havens and force multinational corporations to pay a minimum tax has been weakened by loopholes and will raise only a fraction of the revenue that was envisioned, a tax watchdog backed by the European Union has warned.

The landmark agreement, brokered by the Organisation for Economic Cooperation and Development, set a minimum global corporate tax of 15 per cent. The idea was to stop multinational corporations, among them Apple and Nike, from using accounting and legal maneuvers to shift earnings to low- or no-tax havens.

Those havens are typically places like Bermuda and the Cayman Islands where the companies actually do little or no business. The companies’ maneuvers result in lost tax revenue of $100 billion to $240 billion a year, the OECD has said.

According to the report, being released Monday by the EU Tax Observatory, the agreement was expected to raise an amount equal to nearly 10 per cent of global corporate tax revenue. Instead, because the plan has been weakened, it says the minimum tax will generate only half that less than 5 per cent of corporate tax revenue.