“Back to explode better” : on July 15 and 16, in Bali, the G20 finance, which will bring together the finance ministers of the 19 richest countries plus the European Union (EU), should endorse this wise quote. It should set, in July 2023 rather than October 2022, the finalization of “pillar one” of the comprehensive tax reform planned by the Organization for Economic Cooperation and Development (OECD) – this fiscal big bang that must neutralize tax havens and distribute more equitably the taxation of major multinationals between North and South.

It is in fact the desire of the “Inclusive framework” from the OECD, this group of 140 countries where reform is being discussed and which have just voted in principle. The announcement of this new calendar appears in Report on the taxation of the Secretary General of the OECD “- Mathias Cormann, former Minister of Finance (2012-2020) of Australia, in office since June 2021 – which will be delivered to the G20 ministers and which takes stock of current projects and great progress.

Read also Article reserved for our members Taxation of multinationals: agreement on the 15% rate signed by 136 countries.

What is it concretely? While the “second pillar” of this reform is ready for deployment and involves the creation of a global minimum tax of 15% (instead of 0% currently in tax havens), this “pillar one” must complete and establish fair rules for share the mega-profits made by multinationals, between their country of origin (that of their headquarters) and those in which they really make their profits (the countries where their markets and their customers are located).

Obstacle dimensions

In short, it is about introducing fiscal equity into the system. Megaprofits correspond, in fact, to profits recorded beyond a certain threshold and considered as profit surpluses, which can be shared. However, if the drafting of “pillar one” is well advanced, a major obstacle stands in the way of its possible adoption, in October, on a global level: the American mid-term elections, scheduled for the following month in the United States, which they create political uncertainty and make the vote on the overseas text uncertain.

Read also Article reserved for our members The United States launches the fight for a minimum taxation of multinationals

Therefore, according to the architects of the project, it is better to stick to the agenda of the American giant, essential support for the reform, and opt for a postponement to mid-2023. In this way, the OECD intends to use the next eight months to try to get a vote in favor of the US Congress and legally guarantee the reform project. Thus, a detailed eighty-page document, which takes stock of the work already done on the sharing rules that make up this “first pillar”, is open for public consultation, in a transparent manner, until 19 August.

You still have 49.67% of this article to read. The following is for subscribers only.

#Comprehensive #tax #reform #postponed #July

Leave a Reply

Your email address will not be published.