Pension funds outside the minimum tax of 15% to multinationals

In late October 2021, the G20 leaders reached an agreement on a tax of companies of 15% worldwide for multinational companies from 2023, due to the activity they have in any country and thus avoid tax evasion.

Shortly after two months of this decision, the Organization for Economic Cooperation and Development (OECD) has published this Monday, December 20, the detailed rules so that countries can transpose the international agreement into their laws.

That tax that will have to pay the Business with revenues of more than 750 million euros that are established in more than one country should generate an additional collection of 150,000 million dollars worldwide.

What is the rule for the minimum global tax of 15% to multinationals?

The regulations published now establish a coordinated system to define to which companies the minimum tax is applied, something that will ultimately depend on the modalities defined by the country where they have their headquarters. Consequently, for now there is no list of companies yet, although it is known that there will be thousands.

Public entities, international organizations, non-profit associations, but also pension funds and investment funds, including those dedicated to the real estate sector, will be excluded.

In addition, a mechanism is established to calculate the tax rate that multinationals effectively pay for each country in which they are established and set the amount of complementary tax in the event that they are not subject to a minimum rate of 15% there.

This difference will correspond, in general, to the country of the multinational, which in this way will not have the same interest as now in artificially housing a part of its profits in tax havens.

Pascal Saint-Amans, head of fiscal policies at the OECD, stressed that the rules presented “are essential for the development of the solution based on two pillars, since they convert the bases of the political agreement reached in October into applicable rules.”

The agreement on the minimum corporate tax rate is one of the two pillars (the second) of the October international commitment on the taxation of multinationals.

The first pillar has to do with the obligation for companies in the digital sector to pay taxes in the countries where they operate, and not only where they declare their physical headquarters, on many occasions precisely for tax reasons.

What’s coming

The next step for the OECD, at the beginning of 2022, will be the presentation of the comments that these standards have received. Then, it will also be discussed how the new device will coexist with the United States’ Intangible Low Tax Global Income Regime.

An implementation framework will then be developed focusing on administrative, compliance and coordination issues.

In February, a public consultation will be held on the implementation and on a Taxable Rule on which the Inclusive Framework is also working.

With information from EFE.