The Global Minimum Tax is an international tax system approved by the OECD on July 1 (131 out of 139 countries ratified it) and the first political agreement on the economic G20 in Venice is planned. The agreement, which aims to deal with tax centers, will be ratified by the G20 in Rome in October, and therefore, once approved by the individual states, will take effect from 2023. The technical details will be finalized by October, and above all we will try to convince the countries that have not yet signed the agreement (in Europe: Ireland, Hungary, Estonia). The purpose of the reform is not to make it more convenient for multinational corporations to settle in tax havens.
The developed system is based on two pillars: redistribution of profits of large multinational corporations; Global Minimum Corporate Tax Rate. Once the reform is implemented, the digital web taxes in effect in some countries, including Italy, will disappear (but by 2020 the tax will only increase from 780 million to 233 million). Redistributed Profits The reuse of profits is estimated not only by the digital economy but also by all major multinational corporations (approximately 100), with a turnover of over $ 20 billion per year and a pre-tax profit of at least $ 10 billion. In these cases, the theory of the study is that in countries where multinational companies operate, a portion of the profits will be taxed at a margin of 20% to 30% with a margin of 10%. If the multinational monopoly achieves at least one million revenues in the country, the scattering will be reduced to 250,000 euros for countries with a GDP of less than 40 billion.
$ 100 billion to escape tax authorities
According to OECD estimates, the redistribution of profits could tax about $ 100 billion in profits from tax authorities each year. The second pillar of the second pillar reform affects most multinational companies, with an annual turnover of at least 750 million. In each country where multinational corporations operate, a minimum rate of at least 15% may apply, regardless of where their registered office is located (e.g., affiliates in high-tax countries, eliminating profits, transferring profits to the parent company by paying royalties on parent companies based on patents and tax rights) . The OECD estimates it will receive an additional $ 150 billion in annual revenue at a minimum rate of 15%, but that will depend on how the tax base is defined. Countries that have not yet signed the agreement have lower profit margins. For example, Ireland 12.5% and Hungary 9%.
Problems to be solved
In addition to all the technical issues that need to be resolved by October, there are a number of political issues. The first is the need to include countries that still reject the treaty. This is a point that is clearly remembered in the draft of the final document to be approved by the G20. The second issue that arises is the digital tax on turnover, which is an EU project that will particularly affect American giants on the web, which is why the Biden administration opposes it. However, it has its own problems. In fact, the U.S. president, on the one hand, raises the global minimum tax to 15%, but on the other hand, due to opposition from Republicans, doubles the minimum tax on offshore profits from 10 to 5 to 21%.
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