The global minimum tax increases tax revenue in the world by an estimated 220 billion dollars (204 billion euros). This figure was given by the OECD, the organization of industrialized countries, on Wednesday. By the end of 2021, more than 135 countries have agreed to revamp the global tax system. One element (experts call it "Pillar 2") is the global minimum tax of 15 percent. It applies to companies with sales of more than 750 million euros. Originally, the organization had estimated the associated additional revenue at 150 billion dollars; now the assumed plus turns out to be significantly higher.
The second element of the new regulation ("Pillar 1"), which is to come into force at the beginning of 2024, is a redistribution of taxation rights. According to the updated estimate, this involves $200 billion. The global tax increase here is estimated at $13 billion to $36 billion. The aim was to give market states a greater share of the profits of globalization winners. The new rules apply to companies with global sales of more than 20 billion euros and profitability of more than 10 percent. A quarter of these excess profits will be allocated to market states for taxation. Initially, it had been assumed that the corporations' home countries would lose taxing rights of $125 billion. Because these corporations have grown more strongly than assumed, the OECD experts have raised their forecast.
After initially only digital corporations such as Google, Amazon, Facebook and Apple were in focus and individual countries such as Great Britain, France, Italy and Spain had worked out special digital taxes in order to participate in their profits, the central goal of the multilateral agreement is to prevent such unilateral action. According to the new estimate, only half of this pillar now affects "digital" companies; others that will fall under it make their money from, for example, medicines, vaccines and luxury goods.
"The exact allocation of taxation rights will be determined individually for each of the expected hundred or so companies affected by Pillar 1," explained OECD tax expert Achim Pross. In principle, he said, this will run through a turnover key. "The tax rates that will be levied on the redistributed profits will be determined by the respective recipient states," he told the F.A.Z. The states where these profits are currently taxed will either make these earnings tax-free or credit the taxes of the market states. Additional tax revenues result because the redistribution of taxation rights takes place, on average, from countries with low tax rates to countries with higher tax rates. Large market states such as Germany benefit, but so do other countries in which large international corporations previously paid little tax.
The Munich-based Ifo Institute recently calculated an annual revenue increase from the global minimum tax of up to 6.7 billion euros for Germany. If there were less profit shifting, it could even be up to 8.1 billion euros more. If all countries increased their effective tax rates to at least 15 percent, however, this would ultimately only result in an increase of 1.7 to 1.9 billion euros.
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