The verdict of the global reform on the imposition of tax on large groups is Wednesday, June 30 and Thursday, June 1stIs July at the OECD (Organization for Economic Co-operation and Development). The Paris-based organization is, of course, holding a meeting of the “Inclusive Framework”, a forum of 139 states.
The aim of the scheme is to establish new and better laws for the taxation of multinational companies. This has been under discussion for years. With Joe Biden joining the United States and being recognized by the G7 countries, this seems to be coming to fruition. The OECD must find a compromise on many of the issues currently being discussed.
Face the competition with the lowest taxpayer
The reform aims to combat tax competition between states and dry up tax bases. To do this, the reform plans to introduce a minimum tax rate. If a tax is levied on a country below this limit, another country with the head office of a company will be empowered to levy the option, up to a minimum rate.
As a result, it would be unnecessary for a company to artificially declare its profits in low-tax countries. The rate approved by the G7 countries is 15%. But countries within the framework that includes this rate can revise downwards.
In addition, the reform would provide for higher taxes in the countries where the top 100 companies make a profit. You need to define who actually enters this list. It is hoped that the UK will exclude banks and insurance companies from the list, while commodity manufacturers want mining companies to be excluded.
The minimum tax will be brought to 6 billion France
This reform, which G7 heads of state consider “historic,” should, in any case, enable the financial resources of most countries to increase. A study published by the Economic Analysis Council on Tuesday, June 29 provides statistics for the current project. It estimates that the global minimum tax rate on the profits of multinational corporations will increase by 15% to 6 6 billion annually in France, 8 8 billion in Germany and 15 15 billion in the United States.
In the case of France, two-thirds of the profits come from subsidiaries of French multinationals, which are located in Switzerland, Ireland, the Netherlands and Luxembourg, and tax countries with less than 15%.
However, the ACE estimates that France’s tax revenue will not exceed 2 2 billion if these countries match up and raise their tax rate to 15%.
Half of the top 100 companies are headquartered in the United States
Moreover, according to CEE estimates, another part of the reform aimed at defining the new distribution of rights to be imposed between countries will only bring in 900 million euros to France, which will be neutral to the United States.
Because half of the 100 biggest companies affected by the reform are Americans. There should be five or six French companies on the same list.
If a compromise on the reform is found at a meeting of the OECD, the draft G20 must be submitted to the finance ministers, who will meet in Venice on July 9-10. This will be the last step. Each of the participating countries took steps to implement the measures that the G20 discusses and approves. It would take up to 139 states to copy the reform into their national law, and the process could take at least two years.