Global minimum tax would increase corporate income between 6.5% and 8.1%

The global minimum tax that begins to be applied this year in the European Union (EU) and in countries like United Kingdom, Japan, South Korea either Canadawould increase corporate tax revenues on a global scale by between 6.5% and 8.1%, according to the OECD.

The implementation of this initiative, with which the countries and jurisdictions involved commit to applying a minimum rate of fifteen% For the benefits of large companies, collection would grow between US$155,000 and US$192,000 million annually, indicates the Organization for Economic Cooperation and Development (OECD) in a new impact assessment published this Tuesday.

The main consequence of this minimum tax on multinationals is that the part of the profits of these companies (those that invoice more than 750 million euros) that are subject to a rate lower than the fifteen%and which have been calculated to be a 36.1% of the total.

Specifically, those benefits subject to very low taxation would fall by 69.5%from about US$ 2,143 billion annually to US$ 653,000 million.

The OECD, which points out that its new evaluation is based on data collected in the period 2017-2020, highlights that the global minimum tax would contribute to greater equity between multinationals and other companies.

The reason is that various studies have shown that large groups that operate in many countries usually pay a lower global tax rate than companies that are only in a single market.

Another induced element would be the lesser incentive for companies to domicile their profits in jurisdictions that offer them more favorable tax treatment regardless of whether that is where they operate. That is, it would reduce the attractiveness of tax havens.

The OECD estimates that the displaced benefit would be reduced by half, from an average of US$698,000 to US$356,000 million, and that thanks to the reduction in the tax rate differential.

That differential would drop, for its part, around 30% as a consequence of the increase in taxation of the profits of companies that now pay very little taxes.

So far, there are 45 jurisdictions that have taken different steps to implement this minimum corporate tax rate, which applies to companies with an annual turnover of at least €750 million, the result of the historic agreement reached in 2020 by around of 140 jurisdictions promoted by the OECD.

Among them are the members of the EU, where the agreement came into force on January 1, but also other large developed countries, such as Japan, the United Kingdom, South Korea, Canada, Australia and Norway.

Many others remain to specify this commitment in their domestic legislation, such as the two largest world economies: the United States and China.

But also many of the calls ‘investment platforms’, that is, those in which foreign investment represents more than 150% of its GDP, and which many equate to tax havens.

Based on those that have already implemented this global minimum tax and those that have announced their intention to do so, the organization’s experts calculate that, by 2025, a 90% of the multinationals for which it was designed will be subject to this tax regulation.