THE ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) RECENTLY ANNOUNCED IN PARIS THAT 136 COUNTRIES AND JURISDICTIONS HAVE AGREED TO REFORM THEIR INTERNATIONAL TAX SYSTEMS, IMPOSING A MINIMUM OF 15% CORPORATE TAX ON LARGE MULTINATIONAL CORPORATIONS FROM 2023 TO ADDRESS TAX CHALLENGES BROUGHT ABOUT BY ECONOMIC DIGITIZATION.SOME ANALYSTS BELIEVE THAT THE REFORM OF THE INTERNATIONAL TAX SYSTEM WILL HELP AVOID TAX EVASION AND AVOIDANCE BY LARGE TRANSNATIONAL INTERNET ENTERPRISES, BUT IT MAY ALSO AFFECT THE ECONOMIC STRATEGIES OF SOME DEVELOPING COUNTRIES AND SMALLER DEVELOPED COUNTRIES TO ATTRACT FOREIGN INVESTMENT, WHICH WILL LEAD TO A DECREASE IN FOREIGN INVESTMENT, AND THUS AFFECT THEIR ECONOMIC DEVELOPMENT.THE PLAN LAUNCHED BY THE OECD THIS TIME IS A DUAL PILLAR INCLUSIVE FRAMEWORK THAT REDISTRIBUTES THE TAXATION RIGHTS OF MULTINATIONAL CORPORATIONS' PROFITS AND ESTABLISHES A GLOBALLY EFFECTIVE MINIMUM TAX RATE. THE ORGANIZATION STATED THAT THE FIRST PILLAR OF THIS PLAN WILL ENSURE A MORE EQUITABLE DISTRIBUTION OF PROFITS AND TAXATION RIGHTS AMONG THE LARGEST AND MOST PROFITABLE MULTINATIONAL CORPORATIONS AMONG COUNTRIES. THE NEW RULES REQUIRE MULTINATIONAL CORPORATIONS TO PAY TAXES IN THE COUNTRY WHERE THEY OPERATE, NOT JUST IN THE LOCATION OF THEIR HEADQUARTERS. THE SECOND PILLAR IS TO SET THE GLOBAL LOWEST CORPORATE TAX RATE AT 15%. STARTING FROM 2023, COMPANIES WITH ANNUAL REVENUE EXCEEDING 750 MILLION EUROS (APPROXIMATELY 870 MILLION US DOLLARS) WILL BE SUBJECT TO THIS TAX RATE.THE OECD STATED THAT AFTER THE IMPLEMENTATION OF THIS PLAN, OVER $125 BILLION IN PROFITS FROM APPROXIMATELY 100 LARGE MULTINATIONAL CORPORATIONS WORLDWIDE WILL BE REDISTRIBUTED TO EACH COUNTRY.ANALYSTS POINT OUT THAT AFTER IMPLEMENTING THE GLOBAL MINIMUM CORPORATE TAX RATE RULE, THE MOTIVATION FOR MULTINATIONAL CORPORATIONS TO TRANSFER THEIR PROFITS TO LOW TAX AREAS OR "TAX HAVENS" WILL SIGNIFICANTLY DECREASE.MICHAEL DEVEREAUX, A PROFESSOR OF TAXATION AT THE UNIVERSITY OF OXFORD IN THE UK, HAS CALCULATED THAT 78 OF THE FORTUNE GLOBAL 500 COMPANIES WILL BE AFFECTED BY THE PILLAR ONE RULE, INCLUDING 37 COMPANIES FROM THE UNITED STATES AND 37 COMPANIES FROM EUROPE.REMY BOURGEOIS, A RESEARCHER AT THE FRENCH INSTITUTE OF INTERNATIONAL RELATIONS AND STRATEGIC STUDIES, TOLD XINHUA NEWS AGENCY THAT STARTING TO TAX PROFITS AFTER A COUNTRY GENERATES REVENUE, AS WELL AS A MINIMUM CORPORATE TAX OF 15%, WILL ENCOURAGE LARGE MULTINATIONAL CORPORATIONS TO REDIRECT THEIR INVESTMENTS.IN RECENT YEARS, TRANSNATIONAL INTERNET COMPANIES HAVE BEEN ACCUSED OF TAKING ADVANTAGE OF LOOPHOLES IN THE CURRENT INTERNATIONAL TAX SYSTEM TO AVOID TAXES WHILE EARNING HIGH PROFITS GLOBALLY.IN THE LATE 1980S, TECHNOLOGY COMPANIES SUCH AS GOOGLE AND APPLE INVENTED A TAX AVOIDANCE STRATEGY COMMONLY KNOWN AS THE "DOUBLE IRISH DUTCH SANDWICH" IN THE INDUSTRY, WHICH INVOLVED TRANSFERRING A PORTION OF THEIR OPERATING INCOME IN EUROPE TO BRANCHES IN LOW TAX COUNTRIES SUCH AS IRELAND OR THE NETHERLANDS BEFORE PAYING TAXES. FOR A LONG TIME, FRANCE AND OTHER EUROPEAN COUNTRIES HAVE BEEN DISSATISFIED WITH INTERNET GIANTS' USE OF EU TAX LOOPHOLES TO AVOID TAXES.BOURGEOIS BELIEVES THAT THE NEW TAX SYSTEM WILL PREVENT COUNTRIES WITH RELATIVELY SMALL ECONOMIES LIKE IRELAND FROM CONTINUING TO ATTRACT MULTINATIONAL CORPORATIONS WITH LOWER TAX RATES.THE CORPORATE TAX RATE IN IRELAND IS 12.5%, WHICH IS THE EUROPEAN HEADQUARTERS OF SOME INTERNET GIANTS. IRISH MINISTER OF FINANCE, PUBLIC EXPENDITURE AND REFORM PASCAL DONOHUE PREVIOUSLY STATED THAT IMPLEMENTING INTERNATIONAL TAX REFORMS COULD RESULT IN IRELAND LOSING 20% OF ITS MULTINATIONAL CORPORATE TAX REVENUE.IN ADDITION, SOME COUNTRIES AND INTERNATIONAL ORGANIZATIONS HAVE EXPRESSED DISSATISFACTION WITH THE 15% MINIMUM CORPORATE TAX RATE STIPULATED IN THE NEW PLAN. MARTIN GUSMAN, MINISTER OF ECONOMY OF ARGENTINA, SAID THAT DEVELOPING COUNTRIES WERE FORCED TO CHOOSE BETWEEN "WORSE AND WORSE".SUSANNA RUIZ, HEAD OF TAX POLICY AT INTERNATIONAL RESCUE ORGANIZATION OXFAM, SAID, "THE LEGITIMATE CONCERNS OF DEVELOPING COUNTRIES HAVE BEEN IGNORED. THE PROPOSAL FOR A 15% TAX RATE WILL BENEFIT WEALTHY COUNTRIES AND EXACERBATE INEQUALITYGARY HERFBAUER, SENIOR RESEARCHER AT THE PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS, PREVIOUSLY STATED THAT THE ESTABLISHMENT OF A GLOBAL MINIMUM CORPORATE TAX RATE DEPRIVES SOME COUNTRIES OF POLICY SPACE TO USE LOW TAX RATES TO ATTRACT MULTINATIONAL INVESTMENT, ESPECIALLY FOR ECONOMIES THAT HAVE NO OTHER MEANS TO ATTRACT FOREIGN INVESTMENT. INTERNATIONAL FINANCIAL INSTITUTIONS SUCH AS MULTILATERAL DEVELOPMENT BANKS SHOULD CONSIDER PROVIDING ASSISTANCE TO THESE ECONOMIES.