The jackpot is worth $ 100 billion. This is the amount of additional tax revenue that would be generated by the reform of the digital tax system of multinationals as envisioned by the Organization for Economic Co-operation and Development (OECD). The report, adopted last Friday by the 137 countries of the inclusive framework discussing this reform under the aegis of the OECD, outlines the expected benefits . Pillar 1 (new distribution of rights to be taxed between states) and Pillar 2 (creation of a minimum tax rate) could increase global corporate tax revenues by around $ 50 billion to $ 80 billion each. year. If we add the impact of the American tax reform already in place (Gilti law),“The total effect could represent between 60 and 100 billion dollars per year, or up to about 4% of global corporate tax revenues , “ explains the OECD.
In a post-Covid world where states, faced with a surge in their public debt, are looking for revenue, this would be a significant windfall. It is also “a question of fairness while large multinationals have reaped large profits thanks to this pandemic” , underlined Angel Gurría, Secretary General of the OECD, during a press briefing Monday.
100 billion reallocated profits
More precisely, the first pillar of the reform defines a new concept of taxation based, no longer on the physical presence of a company in a territory, but rather on a digital presence. The OECD thus defines a concept of net taxation of income generated by the digital activities of a multinational in this territory. As a result, the proposed reform would imply a different distribution of taxing rights between the various international States. About $ 100 billion in profits could be reallocated in this way, estimates the OECD. On average, low-, middle- and high-income economies would all benefit from income gains. The fact remains that this new distribution of the rights to be taxed does not convince the United States.the multinationals concerned can freely choose to submit to this new regime.
The second pillar should lead to a significant increase in tax revenue for all countries. “All countries are winners, which is rare,” said the Secretary General of the OECD. Only tax havens would tend to lose tax revenues, as multinationals are less inclined to shift their profits to low tax countries.
Limited impact on growth
This tax hike, taken as a whole, should not translate into lower investment or global GDP. In the long term, the negative effect on global GDP resulting from this increase in taxation is estimated at less than 0.1%. In contrast, the absence of a consensual solution is likely to lead to a proliferation of unilateral tax measures and an increase in harmful tax and trade disputes. In the “worst case” , these disputes could reduce global GDP by more than 1%, calculates the OECD.