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Withholding Tax Emerges as Wedge Issue in OECD Deal

Aug. 25, 2022, 7:40 PM

Multinational corporations and developing countries disagree sharply on whether the global tax deal’s reallocation rules should account for withholding taxes.

The global tax agreement’s Amount A would reallocate a portion of the largest multinationals’ profits to the market jurisdictions where they make sales. Countries must still resolve whether withholding taxes will be counted as part of the reallocation.

“The treatment of withholding taxes in the context of Amount A is of utmost importance,” BDI, the Federation of German Industries, said in a letter to the OECD released Thursday.

Not counting tax collected under withholding measures toward the amount ...