2023-09-03 13:07:27
Two years ago, 137 countries agreed to introduce a global minimum tax. The basic idea is simple: companies should pay at least 15 percent tax on their profits, regardless of the countries – and tax havens – in which they operate. To achieve this, profits generated in a country with a lower tax rate should be post-taxed in the parent company’s country until a tax burden of 15 percent is reached. If the parent company is itself located in a tax haven, the taxes would be levied on the other subsidiaries. As soon as a group has even one subsidiary in a country that participates in the minimum tax, it would be ensured that the entire group pays at least 15 percent tax on its profits.
This basic idea was a coup in 2021: All economically important countries – the USA, China, Japan, Germany, France – and many others signed the declaration. It seemed that the ability of large corporations to shift profits to tax havens and pay virtually no profit taxes was coming to an end. Tax revenue in high-tax countries like Germany would increase substantially, since Germany could post-tax profits that were previously shifted to low-tax countries. The Ifo Institute calculated additional tax revenue for Germany of more than 8 billion euros per year – which corresponds to 22 percent of the average corporate tax revenue over the past five years. The basic idea has now been implemented. The EU has passed a minimum tax directive; a draft law for implementation in Germany is available. But do the regulations keep what was promised?
#tax #havens