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OECD recognizes for the first time that the implementation of a global agreement to tax companies in the digital sector could take a year longer.

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The deal, which the OECD hoped to sign in the middle of this year, would give countries a higher share of the income tax of large US digital groups such as Apple and Google, a division of Alphabet.

This agreement is the first of two pillars of the largest revision of cross-border tax rules in a generation.

Both pillars were originally scheduled to be implemented in 2023.

The review also includes plans for a 15% minimum global profit tax for large multinationals.

OECD Secretary-General Mathias Cormann told a panel at the World Economic Forum in Davos, Switzerland, that progress in resolving technical details of the digital tax agreement is slower than planned.

“We have deliberately set a very ambitious timetable for implementation to keep up the pressure on … but I suspect we will most likely end up with a practical implementation from 2024 onwards,” he said.

Meanwhile, the Biden administration and the European Union are working to enact legislation to implement the global minimum tax agreement agreed in October last year by nearly 140 countries.

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Cormann said it was “visible” in the United States’ interest to join the agreement and said he was “moderately optimistic” that a compromise would be presented in the EU that all members could support.

French Finance Minister Bruno Le Maire, whose country holds the rotating presidency of the European Union until the end of June, said on Tuesday that he was confident that EU finance ministers would unanimously support the global minimum tax next month.

EU approval has been delayed by objections from Poland, which in April rejected a compromise to launch an agreement with 137 EU countries.

Meanwhile, US approval was blocked in Congress, and Cormann was asked if the prospects for US ratification would be affected if Republicans who broadly oppose the agreement won a majority in the House of Representatives and the Senate. in the midterm elections in November.

The deal could be implemented by other countries even if US lawmakers refuse to sign, and Cormann said it would put US multinationals at a disadvantage.

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“I can’t imagine that any country … would have a judgment that would put it at such a disadvantage. I think that no matter who has the majority in Congress … this is obviously in the US interest, “Cormann said.

Congress should approve changes to the current 10.5% global minimum income tax rate in the United States, known as “GILTI,” raising the level to 15% and turning it into a country-by-country system.

The changes were originally included in the comprehensive bill of US President Joe Biden, which was blocked last year, after the objections of the center Democrats in the Senate.

But the prospects for a reduced spending package, including fiscal changes, appear increasingly difficult as mid-term elections for Congress approach and as lawmakers express concern about higher spending, amid high inflation.

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