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What exactly is the Global Minimum Tax (GMT)?

Updated: Nov 4, 2023

The Global Minimum Tax (GMT) is an initiative designed to ensure that multinational corporations pay their fair share of taxes globally.

The goal of the GMT is to address the challenges posed by the digital economy to ensure that corporations do not minimise their tax obligations by, for example, setting up subsidiaries in low-tax countries.

Through the GMT, participating countries agree to set one of the lowest effective tax rates in the world to prevent multinational companies from evading taxes.

This will help to maintain tax fairness and reduce abusive cross-border tax planning.

GMT implementation plans typically consist of two pillars, the first dealing with the taxation of the digital economy and the second introducing the concept of a global minimum tax rate.

The GMT aims to create a fairer and more sustainable global tax system.

Malaysia Government has announced in Budget 2024 that the GMT is expected to be implemented in 2025 and will continue to observe the international development of GMT.









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