Shipping has dodged another bullet from the taxman. A total of 130 countries, representing more than 90% of global GDP, have backed cross-border taxation plans for multinationals, ensuring they will have to pay a global minimum corporate income tax of at least 15%. The talks held at the Organisation for Economic Cooperation and Development (OECD) follow on from discussions into the matter at the G7 summit in the UK last month. The agreement will go to the G20 for political endorsement at a meeting in Venice next week.

Crucially, however, for shipping, the likely new regulations will not change how the industry pays it taxes today.

The new minimum tax rate of at least 15% would apply to companies with turnover above a EUR750m ($889m) threshold, with only the shipping industry exempted.

The International Transport Forum (ITF) at the Organisation for Economic Co-operation and Development (OECD) estimates shipping currently pays just 7% tax on profits on average worldwide.

“The decision to exclude shipping income raises the question what exactly is shipping,” commented Olaf Merk, the ITF’s shipping expert. “If it is in essence all that a shipping company does, excluding shipping from a global minimum tax could make terminal operators and freight forwarders wonder why they pay taxes for the same activities that shipping companies could offer tax-exempt or partially tax-exempt.”

Last month the Federation of European Private Port Companies and Terminals (FEPORT) struck out on exactly this issue.

“FEPORT is preoccupied by the too broad definition of shipping that could lead to an exemption of shipping companies’ own cargo handling activities and beyond. If this were to happen then this would further distort competition in the port services sector to the advantage of shipping companies and undermine the very purpose of the new OECD proposals,” FEPORT stated in a release last month.

The worldwide average statutory corporate income tax rate for all industries is 24%. According to ITF’s own calculations, the effective income tax rate of the 41 shipping firms listed on the New York Stock Exchange over 2010-19 was just 2%. According to KPMG, meanwhile, the nominal corporate tax rate for qualifying shipping groups in the UK tonnage tax scheme is around 1-2%.