Around the world the minimum tax is advancing – the economy

Around the world the minimum tax is advancing - the economy

Most countries want to dry up tax sites / EU member Ireland opposes this.

. Under the framework of the Organization for Economic Co-operation and Development (OECD), 130 countries on Thursday agreed to provide companies with a minimum tax guarantee. From 2023, large, cross-border corporations are expected to pay at least 15 percent profit tax. In addition, levies from digital companies such as Facebook will be redistributed between countries. However, Ireland, a member of the European Union and a low-tax country, does not go along with it. The OECD level agreement is another phase of global reform that individual states will implement over the next few years.

“The agreement to introduce an effective global minimum tax is a major step towards greater tax justice,” said Federal Reserve Minister Olaf Scholes (SPD). The tax revenue of the European Union is estimated at 50 billion euros per year. Germany has at least six billion, and France five billion a year. The OECD expects additional revenue of 150 150 billion.

Basically, governments negotiate with two complexes. First: Minimum tax. It has now introduced a 15 per cent unified lower limit for internationally active companies with a turnover of 750 million. If a German-based company pays less than 15 percent tax on a portion of its foreign income, local tax authorities are allowed to pay additional taxes up to this limit. It will partially remove the basis for shifting taxes abroad and the business models of tax sites. On the other hand, 15 percent is still relatively low: in Germany, the combined corporate and trade tax is 30 percent. The new regulation affects 7,000 to 8,000 companies worldwide.

READ  Brussels launched an investigation into the TAP rescue operation

Second: Tax distribution. Companies such as Amazon, Facebook and Google have so far located their corporate headquarters and are cutting taxes in the countries where customers live. So Europe and Germany do not receive any taxes from internet companies, even though the company earns billions here. Hundreds of companies around the world, with sales of more than 20 billion euros a year, are set to change that soon. U.S. digital companies will have to pay a few billion more in Europe, but local companies such as VW and Daimler will have to pay a few more in the USA or China.

A total of 139 states participated in the discussion. Nine of them initially did not join the compromise, including Ireland, Hungary and Estonia. Ireland offers very low tax rates for branches of foreign companies such as Facebook. This creates problems in the implementation of the agreement in the EU: the proposed proposal requires unity among EU members because it affects tax issues. However, the immediate solution is the unified approach of several EU countries. The Irish government may abandon its resistance. In any case, the Federal Ministry of Finance assumes that the agreement will remain global.

Written By
More from Jake Pearson

NASA’s ingenious helicopter ready for “historic” exploitation of Mars | Technology

Helicopter Ingenuity Next Sunday “Mars is preparing for a historic and complex...
Read More

Leave a Reply

Your email address will not be published. Required fields are marked *