Is it a big setback for taxpayers?

Is it a big setback for taxpayers?

The finance ministers of the G20 and 131 countries formally approved the principle of a global minimum tax for companies this weekend. The decision is a heavy blow to tax havens.

Yes, the Cayman Islands, the Bahamas, Switzerland, Luxembourg, Ireland or the Netherlands … all of these countries, large or small, have built up a portion of their growth in the tax avoidance strategies adopted by some large companies. Sometimes it has become a national sport. In principle, all this will end in 2023 when this agreement comes into force in 2023. Why? Because one of the major changes decided was the idea of ​​a minimum tax rate of 15%. This figure needs to be confirmed, but the principle is: no company anywhere in the world can pay a tax lower than this rate. Knowing the scale of the phenomenon, it is a revolution.

To be precise, do we know how much money went through these tax bases?

Yes, know the orders of magnitude. In a recent study, the Economic Analysis Committee estimated, for example, that the United States transfers 95 billion euros in profits each year to tax sites, mainly in the Bahamas, the Cayman Islands and Ireland. For German companies, it is 46 46 billion and for France 34 34 billion, with Luxembourg, Ireland and the Netherlands being the priority. So these are raw figures, but in another study published last June, the Oxford Economics explained the extent of this phenomenon, with one-third of the profits of American multinational corporations being recorded in tax bases. More than Germany, France, Italy and Spain, the offshore structure accounts for only 7.5% of profits.

See also  Darts World Cup 2021: Adrian Lewis loses in Baggish

But will this agreement make as much of a difference as it claims?

If we think tax bases will end, of course not. Some countries, such as Ireland or the Netherlands, have settled the headquarters of large groups on their soil thanks to the tax bonuses they offer, and these companies are not sure where they will go. Other countries, such as Luxembourg, are suspected of granting tax breaks to large groups without an official trademark, so this is difficult to find. All we can say is that there will be big changes, no doubt, but in the tax sector. The creativity is great, with governments raising the new taxes and companies or individuals trying to avoid them.

Written By
More from Calvin Andrus
Martin Schindler takes over from Raymond van Barneveld
On the first day of the final round at the PDC Qualifying...
Read More
Leave a comment

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