Global minimum tax on multinationals goes live to raise up to $220bn

Big multinational companies will from Monday be subject to a global minimum tax for the first time, as landmark cross-border tax reforms go live, seeking to raise up to $220bn in extra annual revenue.

Almost three years after 140 countries struck a deal to close glaring loopholes in the international system, some major economies will from January start to apply an effective tax rate of at least 15 per cent on corporate profits.

Jason Ward, principal analyst at the Centre for International Corporate Tax Accountability and Research pressure group, praised the “super smart design” of the reform. “It will reduce incentives from companies to use tax havens and incentives for countries to be tax havens,” he said, adding that it puts “a serious brake on what was a race to the bottom”.