The long-negotiated minimum corporate tax of 15% for multinationals comes into force this January 1 throughout the European Union, which thus becomes the first major region to translate this regulation agreed upon by almost 140 countries into its mandatory law. of the Organization for Economic Cooperation and Development (OECD) in 2021 and ratified by the Twenty-seven a year later, and with which it is expected to raise more than 220,000 million dollars (200,000 million euros) additionally per year on a global scale. .
“This new year marks a new starting point for the taxation of large multinationals,” said the European Commissioner for the Economy, Paolo Gentiloni. “The entry into force in Europe and in territories around the world of this historic reform constitutes an important step towards a more equitable corporate taxation system,” he defended in a statement, in which he “encouraged” others. signatories to the global tax deal to “advance talks” to “quickly” also adopt a “fundamental reform that can generate an additional $220 billion a year to help countries around the world finance crucial investments and services.” “high-quality public.”
The minimum corporate tax will apply to multinational business groups and large national groups in the EU with combined financial income of more than €750 million annually. The Commission emphasizes that the new rules will apply “to any large group, both national and international, that has a parent company or a subsidiary in an EU Member State.” According to OECD calculations, these rules will force the 100 largest multinationals in the world to pay taxes on a portion of their profits in the countries where they operate, even if they do not have a physical presence.
The European directive contains a common set of rules on how to calculate and collect an appropriate “supplementary tax” in a particular country if the effective tax rate there is less than 15%. If a subsidiary is not subject to the minimum effective rate in a foreign country in which it is located, the Member State of the parent company will also apply a complementary tax to the latter, explains the Commission. Furthermore, the new directive, the official statement states, guarantees effective taxation in situations where the parent company is located outside the EU, in a country with low tax levels that does not apply equivalent rules.
“By reducing incentives for companies to shift profits to low-tax territories, the new rules will help curb the so-called ‘race to the bottom’ of corporate tax rates in the EU and globally,” the commissioner highlighted. Gentiloni.
The entry into force of the new tax rules “will bring greater equity and stability to the tax panorama of the EU and on a global scale,” celebrates Brussels, for which the new minimum corporate tax also ensures that “taxation is more modern and is better adapted to the globalized and digital world of our days.”
The minimum corporate tax is the so-called “second pillar” of the OECD global agreement negotiated in recent years to adapt to the new global reality, where many companies do not necessarily have a physical presence in the countries in which they operate and achieve great profits. . The signatories of this agreement represent more than 90% of the world’s GDP, according to the Paris-based organization. The “first pillar” of the pact is the partial reallocation of taxation rights, that is, an adaptation of international rules on the way in which the taxation of corporate profits of the largest and most profitable multinationals is distributed among countries, to reflect the changing nature of business models and the ability of companies to do business without a physical presence.
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