The Organization for Economic Cooperation and Development (OECD) made the announcement today in Paris.
As is usual with large internet companies, they brought the change upon themselves as they have gone too far pushing international tax rules to the limit. Countries want their fair share. Large corporations will no longer be able to park assets in tax havens and low taxing countries.
Companies affected would be big multinational firms operating across borders with the OECD suggesting they should have revenue of over 750 million euros ($821 million).
They would also have to have a “sustained and significant” interaction with customers in a country’s market, regardless of whether they have a physical presence there or not.
Not only would big internet companies be covered, but also big consumer firms that sell retail products in a market through a distribution network, which they may or may not own.
Companies meeting those conditions would then be liable for taxes in a given country, according to a formula based on set percentages of profitability that remain to be negotiated.