Global Minimum Corporate Tax Rate: Financial Times

Multinationals can sell products and services in more than 200 nations, and many, especially big technology firms, shift profits across borders to minimize tax bills. The Organization for Economic Co-operation and Development, which represents democracies, is reviewing global tax policies: one recommendation would allow countries to tax operations even if the companies have no physical presence, and the other is the minimum corporate tax. “Together the two proposals aim to eliminate the huge advantages some companies enjoy by shifting profits around the world to minimise their tax bills — a strategy that has become particularly common among those involved in digital technologies,” explains Chris Giles for Financial Times. “The proposals would also reduce the incentives for countries to lower their tax rates in an effort to attract such footloose businesses.” If OECD and G20 countries agree, the proposals could be added to national tax systems and treaties. Giles notes that countries approve because they want to avoid a patchwork of stringent measures. Discussions focus on guiding principles and have yet to designate a specific tax level. – YaleGlobal