OECD forecasts much more revenue from corporate tax treaties

The Organization for Economic Cooperation and Development (OECD) has revised upwards its calculations on the collection that will be achieved with the two international agreements on a minimum rate of 15% for the tax of companies and on the obligation for multinationals to pay in the countries where they operate.

The minimum rate of 15% will translate into some US$220 billion annually worldwide, which is equivalent to 9% of annual income from corporate tax, a figure clearly higher than the US$150 billion initially estimated, he announced. this Wednesday.

Regarding the attribution of new taxation rights to the countries in which the multinationals do business, even if they do not have their headquarters there, it will affect some US$200,000 million in profits, and not US$125,000 million, which was the calculation that It was done after those agreements were reached in July 2021.

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This will mean a different distribution between countries of the taxes that companies will have to pay for these benefits, but it will also generate additional income for public coffers of between US$13,000 and US$36,000 million globally.

The OECD stressed that the large-scale application of this device “It will contribute to stabilizing the international tax system, improving legal certainty in tax matters and avoiding the multiplication of unilateral taxes on digital services and commercial and tax disputes” that would derive

Its technicians estimate that this type of unilateral measures that would be implemented without the international agreement for a more equitable distribution of taxation on profits could amputate GDP by 1% per year.

That “first pillar” of the July 2021 agreements, signed by more than 135 countries and jurisdictions around the world, representing more than 90% of global gross domestic product (GDP), establishes the obligation for large companies, particularly in the digital sector, to pay taxes where they are active, not just where they declare their physical headquarters, frequently chosen to avoid taxes.

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As regards the minimum rate of 15% for corporation tax, it will affect companies with a turnover of at least US$750 million that are established in more than one country.

The OECD, which led the negotiations that led to the agreements two and a half years ago, insisted that the reforms “will ensure a fairer allocation of tax rights between jurisdictions of the largest and most profitable multinationals, including digital.

The profits of the “first pillar” will be widely distributed among all countries, rich and poor, with the exception of the so-called “investment centers”, which in many cases function as tax havens, since they attract many companies to establish their headquarters in exchange for low or no fees, and that they will obviously lose out, according to their new analysis.

Specifically, those who will benefit the most will be low- and middle-income countries, as they will obtain new taxing rights without affecting their current ones. low-income, middle-income, and wealthy

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This new evaluation comes weeks after the EU managed to unblock the negotiations between its members in December to apply en bloc the “pillar two” on the minimum rate of corporate tax.

That same “second pillar” has recently also been incorporated into the budgets of other countries such as UK and Canadaand it has been voted on South Korea.

They have also announced their intention to transcribe it in their tax regulations South Africa, Hong Kong, China, Singapore and Switzerlandamong others.

Also, Australia, Jersey, Malaysia or New Zealand they are launching public consultations to incorporate it.

Source: EFE.