The worst time for a global minimum tax

The European Union is entering a period of economic crisis. The war and sanctions are causing unprecedented challenges: rising interest rates and inflation, rising food and energy prices, and supply chain disruptions. Governments must prioritize the economic interests of their countries and address the cost of living crisis.

Adopting the EU Commission’s minimum tax directive now would be a serious mistake. The policy is based on rules published in 2021 by a group of more than 100 countries working together to address tax challenges in the digital economy. It has two pillars: the first aims to end tax avoidance by large tech companies by getting them to pay their fair share of taxes where their activities are carried out and where their profits are made. The second aims to introduce a global minimum tax of 15% on corporate profits to end tax competition. The global tax treaty was due to come into force in 2023, but in May OECD Secretary-General Mathias Cormann announced implementation could take longer.

https://www.wsj.com/articles/hungary-global-minimum-tax-european-union-european-commision-competition-economic-crisis-investment-big-tech-fair-share-11655839990 The worst time for a global minimum tax

Mike Fahey

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