130 countries back global minimum tax for companies

FRANKFURT, Germany — Some 130 countries have agreed on a global minimum tax backed by U.S. President Joe Biden as part of a worldwide effort to keep multinational firms from dodging taxes by shifting their profits to countries with low rates.

The agreement announced Thursday is an attempt to address a globalized and digital world economy in which profits can be relocated across borders and companies can earn online profits in places where they have no taxable headquarters.

The deal calls for a global minimum tax of at least 15 percent, a element pushed by Biden as he seeks to raise revenue for his infrastructure and clean energy plans. There are technical details that need to be worked out and it would be at least 2023 before the agreement takes effect.

The agreement, announced by the Paris-based Organization for Economic Cooperation and Development, also provides for taxing part of the profits the largest global companies in countries where they do business online but may have no physical presence.

French Finance Minister Bruno Le Maire called it “the most important international tax agreement in a century.”

Countries led by France have already started imposing unilateral digital taxes aimed at U.S. tech giants such as Amazon, Google and Facebook; under the deal, they would agree to withdraw those taxes, regarded as unfair trade practices by the U.S., in favor of the global approach.