Philippines to implement Global Minimum Tax for multinational corporations

The Global Minimum Tax (GMT) is a global tax system developed by the OECD and G20 countries that requires multinational corporations with over €750 million in annual revenue to pay a minimum 15% corporate tax rate.

This initiative aims to combat tax avoidance by preventing companies from shifting profits to countries with low or no tax rates.

Over 147 countries, including the Philippines, have joined the OECD/G20 Inclusive Framework on BEPS, which includes the implementation of the GMT.

Implementing the GMT in the Philippines is seen as beneficial, as it can increase government revenues by ensuring large multinational corporations contribute their fair share of taxes.

The Philippines plans to introduce a Qualified Domestic Minimum Top-up Tax (QDMTT) and an Income Inclusion Rule (IIR) to ensure these corporations meet the 15% minimum effective tax rate, thus safeguarding domestic tax revenues.