The deal faces several hurdles before it can take effect. U.S. approval of related tax legislation proposed by Biden will be key, especially since the U.S. is home to many of the biggest multinationals. A rejection by Congress would cast uncertainty over the entire project.
The deal is an attempt to address the ways globalization and digitalization have changed the world economy. Alongside the minimum tax, it would allow countries to tax part of the earnings of companies whose activities, such as online retailing or web advertising, don’t involve a physical presence.
On Thursday, Ireland announced that it would join the agreement, ditching a low-tax policy that has led companies like Google and Facebook to base their European operations there.