240 billion dollars a year: the US stalemate could jeopardise a major tax deal
A political stalemate in Washington could destroy a landmark tax deal that has been carefully negotiated between 140 countries for more than a decade.
Some analysts warn that the failure of the United States to ratify the deal could lead to a tax war among the world's richest nations, hitting tech giants like Google $GOOG, Microsoft $MSFT, Apple $AAPL, Meta $META and Amazon $AMZNhard .
What's going on?
The Organisation for Economic Co-operation and Development (OECD) has been working for years on an agreement among its member countries that would close loopholes allowing large multinational corporations to avoid paying taxes of up to $240 billion a year.
In 2021, the OECD came up with an agreement that was signed by all parties involved. This reform, called 'Pillar 1', would simply require companies to pay taxes in the country where they made their money, regardless of whether they are based there.
It took more than a decade of work by the OECD and other parties to reach this agreement.