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Illustration: Aïda Amer/Axios

A new global agreement to levy a near-universal 15% minimum tax on large corporations' profits could cost tech giants billions each year. Yet lobbies representing the companies have rallied behind the plan, largely because it phases out a different kind of tax that tech dislikes even more.

The big picture: The minimum tax passed a crucial hurdle last week when more than 130 nations reached agreement at an Organization for Economic Cooperation and Development (OECD) meeting. It still awaits final approval from many stakeholders, including the U.S. Congress.

Driving the news: Both the Internet Association and the Computer & Communications Industry Association (CCIA) signaled tentative support for the global tax after the agreement. "This is an important step towards more fairness and certainty in the global tax system," CCIA vice president Christian Borggreen said in a statement.

Tech's biggest reason to be enthusiastic about this tax: Countries that sign on to the scheme will also be required to back away from existing or planned "digital services" taxes that take specific aim at tech revenue.

  • Dozens of countries around the world already have such taxes in place or are in process of implementing them, including France, the U.K., Italy and Canada.
  • Companies that are unhappy at the prospect of a broad and varying digital services tax regime view the minimum tax approach as a lesser evil.

Between the lines: Tech companies, like other corporations operating globally, often move assets from nation to nation to minimize their tax liabilities.

  • That's especially easy for companies that work primarily in software or media, since they're not dealing with physical factories and goods.
  • Any rule that takes wide effect around the globe reduces the companies' chances to shop for lower rates.
  • The OECD plan also empowers governments to tax companies anywhere they do business, rather than just where the firm is based.

The intrigue: The OECD vote looks like a tentative win for the Biden administration's multilateral approach to resolving the tax issue, in contrast to the Trump administration's disdain for that kind of diplomacy.

  • That makes it less likely that Republicans in Congress — never big fans of taxing business to begin with — will support it.
  • Democrats would get their chance to enact it anyway, without bipartisan support, via reconciliation, if they're able to move that messy process forward. Treasury Secretary Janet Yellen said over the weekend she was "confident" the tax would be included in the reconciliation bill.

Yes, but: Tax lawyers of the caliber these companies can afford are endlessly crafty, and loopholes get written into laws at the last minute — making the odds that an agreement like this will be truly effective hard to gauge.

Go deeper

Jan 13, 2022 - Health

Quebec tax on unvaccinated Canadians drives surge in vaccine appointments

Quebec Premier François Legault. Photo: Minas Panagiotakis/Getty Images

Quebec health officials said Wednesday bookings for COVID-19 vaccine first-dose appointments have jumped — with some 7,000 residents signing up after they announced plans to tax people who are unvaccinated for non-medical reasons.

The big picture: Quebec Premier François Legault said the Canadian province would impose a health tax on residents who refuse to get their first dose in the coming weeks that would be more than $100, per CBC News.

IRS "in crisis," government watchdog says

The seal of the Internal Revenue Service (IRS) at the agency's headquarters in Washington, D.C. Photo: Andrew Harrer/Bloomberg via Getty Images

The Internal Revenue Service began the last filing season with a backlog of 11.7 million returns from 2020, and the 2019 returns were not cleared until June 2021, according to a new report by the National Taxpayer Advocate.

Why it matters: "During 2021, tens of millions of taxpayers were forced to wait extraordinarily long periods of time for the IRS to process their tax returns, issue their refunds, and address their correspondence," wrote national taxpayer advocate Erin Collins, adding that "the IRS is in crisis."

Judge nixes Gulf of Mexico oil leases in climate-focused ruling

Tug boats prepare to tow the semi-submersible drilling platform Noble Danny Adkins through the Port Aransas Channel into the Gulf of Mexico on December 12, 2020 in Port Aransas, Texas. Photo: Tom Pennington/Getty Images

A federal judge on Thursday canceled the Biden administration's late 2021 sale of new oil-and-gas drilling leases in the Gulf of Mexico.

Why it matters: The ruling that the greenhouse gas emissions analysis by the Interior's Bureau of Ocean Energy Management (BOEM) was insufficient is a win for green groups that challenged the decision, as they seek to curb fossil fuel production.

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