The International Monetary Fund calculates that the minimum tax for multinational companies will increase global revenue by 16 points

The International Monetary Fund (IMF) has calculated a minimum tax rate of 15% on multinational corporations, agreed in October by the Organization for Economic Co-operation and Development (OECD) and 137 G20 countries (International Economic Forum, which brings together major economies in development). Emerging markets) will increase tax collection globally by 16 percentage points.

In a report released Tuesday, the institute warned that “international tax coordination is now more necessary than ever.” As he argues, globalization and digitalization have led to lower taxes for large companies. A situation that exacerbates the risk that “public investment and social spending is insufficient” in the context of tackling climate change and the need to reduce inequality.

For these reasons, the International Monetary Fund “historically” considers the agreement reached by the OECD and the G20 to impose a 15% universal tax on multinational corporations and other fiscal measures to be implemented by 2023 to increase and rationalize global collection. But he goes further and says that “much more needs to be done.”

The transposition of this agreement into Community law has been delayed due to opposition from some partners. Last, Poland.

On the other hand, many critical voices have emerged who consider 15% as low, which should be higher. Including economist Thomas Pickett. “Even the United States wanted higher taxes,” he said during a meeting with his third vice president and labor minister, Yolanda Diaz, in Madrid.

“The real novelty in the agreement would be to agree to a 25% world minimum rate, which is calculated on all profits. “It would be a big step forward to neutralize tax competition and fight tax evasion, while giving states a real margin to fund the social, environmental and economic challenges they face.”

60% of profits of multinational companies are “surplus”

“Global companies now have more opportunities to make big profits without being physically present (subject to taxes),” the IMF said in a statement. “Multinational companies made a profit of 9.2% of world GDP in 2019, of which a significant part, about 60 percent, is excess profit,” he added. In exaggeration, it refers to profits above the “normal” historical average, and this refers precisely to tax evasion, monopolies and oligopolies.

And, at the same time, distorting small countries with social systems lower than large economies, or even virtually non-existent and low taxes, which “attracted large proportions of international investment, corporate profits (estimated at 36% of total multinational profits and personal wealth (8% of global household income).” By) ”.

The bottom line is that corporations and the richest people have moved from 40% on average globally to the current 20% in the last 40 years. 20 points less, according to the indicators developed by the Multilateral Institute.

“Historic Agreement” for the IMF

The agreement between the OECD and the G20 is based on two pillars (see chart). The first relates to the shifting of tax payments by multinational companies from the countries where their fiscal headquarters are located to the areas in which they operate. This event is aimed at the technical giants. This will further benefit advanced economies and reduce the shrinkage of small countries, which the International Monetary Fund calls “investment hubs”, among which would be tax havens.

The second pillar is the minimum corporate tax rate of 15% for large companies. A measure that will increase global collection by 7.6 points, which will reveal itself an increase in the average rate and another 8.1 points, due to less tax competition.

The first pillar includes multinational companies with global revenues in excess of € 20,000 million and remuneration of more than 10%, excluding mining companies (oil or mining) and regulated financial services. The second column includes companies with a turnover of € 750 million or more globally and includes that the minimum corporate tax rate is 15% in all jurisdictions that comply with the agreement.

In December, the European Commission submitted a proposal to introduce the second pillar of the OECD-G20 tax agreement into EU (EU) legislation. “The proposal fulfills the EU’s commitment to act extremely swiftly and be the first to implement the historic global tax reform agreement,” the then CEO said.

The calendar, indicating 2023, now looks very ambitious, according to various experts. Recently, Poland was the last European partner to block the proposal. Approval, as it is a fiscal issue, requires unanimity among member states.

This was the second attempt to shift the norm. The first to be rejected were Hungary, Estonia, Sweden and Malta. These last three have already changed position. Hungary is unknown. Poland’s argument is that the EU can not give up on the first pillar.