EXPLAINER: Deterring tax avoidance by global companies

One hundred and thirty countries have agreed on a  15%  global minimum tax on big, multinational corporations

A broad swathe of countries have agreed on a major overhaul of how they tax the world's biggest companies when they do business across borders. It's an attempt to better cope with a world where globalization and an increasingly digital economy mean that profits can move easily from one jurisdiction to another. The agreement was sealed Thursday among 130 countries in talks overseen by the Paris-based Organization for Economic Cooperation and Development, though there are still details to work out and hurdles to clear before it can take effect in 2023. The key feature is a global minimum corporate tax of at least 15%, endorsing the broad outlines of a proposal from U.S. President Joe Biden. While the tax deal is complex in its details, the idea behind the minimum tax is simple: if a multinational company escapes taxation abroad, it would have to pay the minimum at home.