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Archyde.com
Published on
Jan 18, 2023
PARIS (Archyde.com) – A new international tax on big business profits might bring in around $250 billion (regarding 230.2 billion euros) in additional revenue for governments, more than initially estimated, the IRS said on Wednesday. Organization for Economic Co-operation and Development (OECD).
Nearly 140 countries are preparing to implement next year the agreement on a global minimum tax on multinationals intended to take into account the hegemony of digital giants like Apple and Amazon, which can register their profits in countries offering low taxation.
The first pillar of the agreement aims to reallocate 25% of the profits of large companies to the taxation of the countries where their customers are located, regardless of the physical location of these multinationals.
The second pillar provides for setting a minimum tax rate on profits of 15%, allowing governments to apply additional taxation on any profit recorded in a country with a lower rate.
The OECD estimates that this 15% tax rate might bring in $220 billion, or 9% of global corporate tax revenue, up from a previous estimate of $150 billion.
At the same time, the reallocation of profits provided for in the first pillar of the agreement should make it possible to cover the profits of large companies up to 200 billion dollars, once morest 125 billion previously estimated.
This increase is mainly linked to the rise in profits of large companies in recent years, in particular those of the digital giants.
As a result, profit reallocation is expected to yield between $13 billion and $36 billion in tax revenue. “The new economic impact analysis underscores once once more the importance of rapid, effective and widespread implementation of these reforms so that these considerable revenue gains can materialise,” said the OECD Secretary-General. , Mathias Corman.
(Report Leigh Thomas; Blandine Hénault for the French version, edited by Kate Entringer)
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