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Multinational firms will have to pay that level of tax on all of
the profits they make worldwide, regardless of where the profits
are generated.
In 2021 almost 140 countries agreed to an Organisation for
Economic Cooperation and Development deal they are meant to
implement from next year to prevent big companies like
Alphabet's Google or Amazon avoiding taxation by transferring
profits to low-tax countries.
This will apply to all such companies and large-scale domestic
groups with turnover above 750 million euros ($800 million) per
year.
The increase is expected to raise $220 billion globally for
governments strapped for cash after the COVID-19 pandemic and
struggling to ride out a cost-of-living crisis, although the
ratification process has hit hurdles in various countries.
Last December the European Union member states agreed on a
common directive to ensure uniform implementation of the tax
within the EU, and that directive must be passed into national
law in all EU countries by the end of the year.
The law was approved in Germany with the support of all the
coalition parties and the main opposition party.
The Ministry of Finance estimated earlier this year that
additional tax revenue of 910 million euros could be expected in
Germany from 2026. In 2027 and 2028, the tax is forecast to
bring in 535 and 285 million euros, respectively.
($1 = 0.9362 euros)
(Reporting by Maria Martinez; Editing by Hugh Lawson)
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