The landmark agreement, brokered by the Organization for Economic Cooperation and Development (OECD), set a minimum global corporate tax of 15%. The idea was to stop multinational corporations, among them Apple and Nike, from using accounting and legal maneuvers to shift earnings to low- or no-tax havens.
“Those havens are typically places such as Bermuda and the Cayman Islands where the companies actually do little or no business. The companies’ manoeuvres result in lost tax revenue of $100 billion to $240 billion a year,” the OECD has said.
According to the report, being released on Monday by the EU Tax Observatory, the agreement was expected to raise an amount equal to nearly 10% of global corporate tax revenue. Instead, because the plan has been weakened, it says the minimum tax will generate only half that — less than 5% of corporate tax revenue.
Much of the hoped-for revenue has been drained away by loopholes, some of them introduced as the OECD has been refining details of the agreement, which has yet to take effect. The watchdog group estimates that a 15% minimum tax could have raised roughly $270 billion in 2023. With the loopholes, it says, that figure drops to about $136 billion.
Over the summer, the OECD agreed to delay for at least a year — until 2026 — a provision that would have let foreign countries impose additional taxes on U.S. multinational companies that failed to pay at least a 15% rate on their overseas earnings.
This story is from the October 27, 2023 edition of AppleMagazine.
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This story is from the October 27, 2023 edition of AppleMagazine.
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