Historic OECD agreement reforms international taxation: global corporate tax of at least 15% will move forward - "This package does not eliminate tax competition (...), but it does establish multilaterally agreed limitations." These are the first words of the secretary-general of the OECD, Mathias Cormann, after the historic agreement that more than 130 countries (more than 90% of world GDP) signed this morning, after intense negotiations that have been going on for months.

Historic OECD agreement reforms international taxation: An agreement that will raise the minimum corporate tax worldwide to at least 15%, a measure that already received the G7 coat a few weeks ago and is ratified at the OECD meeting. In a statement, the entity emphasizes that the" new and ambitious framework "signed" for international tax reform " consists of two pillars.

The first pillar " will ensure a fairer distribution of tax benefits and rights among countries with respect to the largest multinational companies, including digital ones." These firms will see their tax rights reallocated: they will move from their home countries to the market countries where they do business and make profits, even if they have no physical presence there.

Historic OECD agreement reforms international taxation

The second pillar establishes that minimum base for tax competition, "by putting in place a global minimum tax that countries can use to protect their tax bases." This is an effective corporation tax of at least 15%.

It is a framework signed by 139 countries around the globe that some countries, including Ireland, Estonia and Hungary, have refused to sign. The G7 countries initialled without any major problem, after the green light obtained at their meeting a few weeks ago. Big tech companies could be forced to pay at least $ 100 billion more a year starting in 2023, when this new framework would be effectively implemented and put into effect.

Historic OECD agreement reforms international taxation: "After years of intense work and negotiations, this historic package will ensure that large multinational companies pay their fair share of taxes everywhere," Cormann said. Before the end of October of this year you will have to finish all the technical work to tie this new package of measures.

At the moment only the large multinationals that have a turnover of more than 20,000 million euros will be affected. That threshold will be lowered to 10,000 million euros after 7 years. In addition, the taxed signatures will have to have a profit margin of more than 10%, as was proposed at the G7 meeting weeks ago.

Historic OECD agreement reforms international taxation

This profit margin opened the door for giants like Amazon to be exempted from facing these new tax obligations (the company is less than 10%), although the colossus of electronic commerce himself announced in the media that they did plan to assume this resolution. The big digital companies have already given their approval to a fiscal framework like the one approved this morning, as it was written after the precedents of agreement in the G7.

Historic OECD agreement reforms international taxation: In fact, the new framework will allow not only tech companies, but luxury firms or pharmaceutical companies to also pay more taxes in the countries in which they operate.

The agreement is reached after intense lobbying by the Biden Administration. The Financial Times recalls that in exchange for accepting some tax that the US charges GLASSES (Google, Amazon, Facebook, Apple) the charge other states, Washington could expect other countries to withdraw their proposals for regulation of the industry, such as taxes on digital services. The Spanish Google tax, for the moment, has not been settled even once, although it is in force since January.

Historic OECD agreement reforms international taxation

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PepsiCo relies on the Murcian orchard to face recovery in southwestern Europe: why Alvalle gazpacho has a lot to say

The American food giant PepsiCo has suffered especially from the impact of the pandemic in southwestern Europe. For 2 reasons: the dependence that this geographical area has on tourism and the economic weight of hospitality.

At the head of this market, which includes Spain, Portugal, Italy and Andorra, is a Spaniard: Narcís Roura. The manager does not hide the complex of 2020 that has been left behind:"First the total closure and, later restrictions, have affected us, especially in the horeca channel (hotels, restaurants and cafes)". The manufacturer of Pepsi, Kas, Tropicana, Cheetos, Doritos or Matutano, has in the hospitality industry its greatest bastion.

In fact, food has been gaining ground year after year to the other big business division: drinks. According to the company's annual reports, if 10 years ago this business represented 49% of global revenue, in 2020 its weight stood at 55% (about 32,450 million euros).

"In retail, we are one of the 10 companies that have grown the most in the market and in snacks, the one that most”, recognizes the manager. A higher share, however, has not managed to compensate for the decline in business.

Despite everything, Roura remains hopeful:"We have emerged strengthened from this crisis, while we have improved competitiveness". In this last point, la huerta Murciana has played and will play a key role. With a proper name: Allvalle. PepsiCo has invested 31 million euros in the brand of gazpachos and hopes that it will be a boost for the south-west European to recover pre-pandemic levels at the end of this year.

The manufacturer of drinks and snacks does not reveal how much each geographical division contributes to its global turnover. It does give data by continent. In 2020, Europe accounted for 17% of revenues, only behind its main market, the US.

The division led by Roura would contribute between 7% and 8% of the European business. Taking as a reference 2020, the southwest billed 661 million of the 9,830 million dollars (8,270 million in euros) generated in the Old Continent.

How did the pandemic impact globally and in Europe? At the start of 2020, PepsiCo's profit fell by 5.3% and the company left its forecasts for the year as a whole on a dead letter.

Meanwhile, in Europe, sales grew by 13.5%, to 1,839 million dollars (1,690 million euros), faster than Asia-Pacific and Oceania (5.7%) and Latin America (5.6%).

PepsiCo closed the year with a 2.6% profit reduction, to 7,120 million dollars(about 6,000 million euros). Sales grew by 4.8% and exceeded 59,000 million euros.

The start of 2021 showed the resilience of the group, which ended the first quarter beating forecasts: it gained 28% more, to 1,442 million euros, a figure 21% higher than recorded in 2019.

Net income amounted to $ 14.82 billion (€12.463 billion), 6.8% more than in 2020. However, the recovery seemed to be expected in Europe, where PepsiCo's activity fell by 2.4%, to 1,499 million euros.

"We are satisfied with the results we have achieved at the beginning of the year; we have successfully overcome the challenges caused by the difficult situation of last year," says Roura.

And he is confident that the plans deployed will bear fruit: "In the last year, we have made significant investments in our production plants and very strong bets on leading brands in their categories."

This is the case of gazpachos Alvalle, where the group has increased the total investment to 31 million, after recently allocating 6 million euros to improve its production plant, located in the Murcia town of Alcantarilla.

"Alvalle is the jewel in our crown," he says. Since the firm joined the company in 1999, its production has increased by 6 times and 50% of the total is exported to international markets such as France, the United Kingdom and, especially, the United States, where it continues its expansion. Currently, it produces more than 30 million liters of gazpacho annually and has a plant team of more than 100 people. In the agricultural supply chain it employs about 500 people.

This push, coupled with Pepsi's 100% recycled plastic bottles and continuous improvement in point-of-sale execution, will help them become more competitive and continue to gain market share.