OECD member countries approved, as part of efforts against artificial profit shifting in multinational companies, the creation of a global minimum tax, marking a major change in international taxation.

In general terms, the idea of this tax is to empower the country of residence of the parent company of a multinational corporation to tax income generated in other jurisdictions where income tax is non-existent or at a rate lower than 15%.

In terms of the agreement reached, OECD members, such as Mexico, commit to modify their local legislation to ensure that multinational companies domiciled in their jurisdictions pay an income tax of at least 15% in each of the jurisdictions where they operate.

In this way, it is intended to eliminate competition between jurisdictions to attract investment based on low tax rates and to discourage the relocation of operations to these jurisdictions. One of the main targets of this agreement is the Republic of Ireland, which, with its 12.5% tax rate, is the European headquarters of most large US companies.

The full details of this tax are not yet known, but it is presumed that its provisions will only be applicable to the Groups that are required to file the country-by-country information return.

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