Hungary has already vetoed the directive at Ecofin to transpose the agreement reached almost a year ago between more than a hundred countries.
The global agreement reached in 2021 to tax the profits of digital giants (Pillar 1) and with a minimum rate of 15% those of other large multinationals (Pillar 2) will have to wait. After hinting at it in May, the Organization for Economic Co-operation and Development (OECD) confirmed on Monday that the measure will not come into effect until at least 2024.
The complexity of the standard’s implementation in 2023, as initially planned, became clear again last week, when Hungary vetoed Ecofin, the body that brings together the European Union’s finance ministers, the directive to extend the agreement between nearly 140 countries to convert almost a year ago.
The signatory states plan that the tax, included in the so-called Pillar 1 of the regulation, which affects digital companies, will help prevent the industry giants from continuing to implement complex tax frameworks to pay less taxes as they develop their activity , artificially hosting your benefits declaration in the regions where they pay less taxes, if not in tax havens.
This tax, as explained by the OCD, would affect all companies with a combined global turnover of more than 20,000 million euros per year, with a profitability of more than 10%. The organization’s calculations suggest that this system would help redistribute more than $100,000 million a year among the signatory countries.
The aim of the main promoters of this ‘fiscal revolution’, including US Secretary of the Treasury and former President of the Federal Reserve (Fed), Janet Yellen, is to avoid the so-called fiscal dumping by which large multinationals create complex corporate structures every so often. may pay taxes and tax their profits in countries with greater tax advantages.
The tax would also come at a key time when governments would need to maintain collection improvements to finance the projected increase in spending due to the energy crisis. According to a recent report from the Tax Justice Network, states worldwide lose $360,000 million a year through tax evasion and abuse by large corporate groups.
In 2020, for example, in the heat of the decline in corporate profits during the crisis, collection by companies in Spain fell by 27% to just over 17,000 million euros. In 2007, the figure was over 44,000 million.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
