{"id":8361,"date":"2021-07-20T14:59:30","date_gmt":"2021-07-20T14:59:30","guid":{"rendered":"https:\/\/taxops.com\/?p=8361"},"modified":"2021-11-22T16:37:14","modified_gmt":"2021-11-22T16:37:14","slug":"130-countries-back-a-global-minimum-tax","status":"publish","type":"post","link":"https:\/\/taxops.com\/130-countries-back-a-global-minimum-tax\/","title":{"rendered":"130 Countries Back a Global Minimum Tax"},"content":{"rendered":"\n[et_pb_section][et_pb_row][et_pb_column type=&#8221;4_4&#8243;][et_pb_text]<!-- divi:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/divi:spacer -->\n\n<!-- divi:image {\"align\":\"right\",\"id\":8363,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-1024x536.png\" alt=\"Emerging Global Minimum Tax\" class=\"wp-image-8363 lazyload\" data-srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-1024x536.png 1024w, https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-980x513.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-480x251.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><noscript><img decoding=\"async\" width=\"1024\" height=\"536\" src=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-1024x536.png\" alt=\"Emerging Global Minimum Tax\" class=\"wp-image-8363 lazyload\" srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-1024x536.png 1024w, https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-980x513.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-480x251.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><\/noscript><\/figure><\/div>\n<!-- \/divi:image -->\n\n<!-- divi:quote -->\n<blockquote class=\"wp-block-quote\"><p><em>In an effort to&nbsp;root out global&nbsp;corporate&nbsp;tax avoidance,&nbsp;officials from 130 countries agree to&nbsp;a global minimum tax.&nbsp;<\/em>&nbsp;<\/p><\/blockquote>\n<!-- \/divi:quote -->\n\n<!-- divi:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/divi:spacer -->\n\n<!-- divi:paragraph -->\n<p>Treasury Secretary Janet Yellen announced&nbsp;July 1 of this year an agreement by 130 countries&nbsp;to support&nbsp;a&nbsp;U.S. proposal for a global minimum tax&nbsp;(GMT)&nbsp;on corporations. Although&nbsp;not explicitly set,&nbsp;the Biden Administration has pushed for an actual tax rate of at&nbsp;least 15%&nbsp;(<a href=\"https:\/\/www.wsj.com\/articles\/u-s-wins-international-backing-for-global-minimum-tax-11625153698?mod=e2tw\" target=\"_blank\" rel=\"noreferrer noopener\">WSJ<\/a>).&nbsp;&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:paragraph -->\n<p>In a&nbsp;<a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/statements-releases\/2021\/07\/01\/statement-by-president-joe-biden-on-todays-agreement-of-130-countries-to-support-a-global-minimum-tax-for-the-worlds-largest-corporations\/\" target=\"_blank\" rel=\"noreferrer noopener\">White House Statement<\/a>,&nbsp;President Joe Biden&nbsp;thanks&nbsp;the signatories of the Paris&nbsp;Organisation&nbsp;for Economic Co-operation and Development (OECD)&nbsp;statement, which&nbsp;include&nbsp;90% of the world\u2019s economy.&nbsp;Biden\u2019s proposed&nbsp;<a href=\"https:\/\/www.wsj.com\/articles\/whats-in-bidens-2-trillion-corporate-tax-plan-11617206009?mod=article_inline\" target=\"_blank\" rel=\"noreferrer noopener\">Made in America<\/a>&nbsp;tax plan&nbsp;calls&nbsp;for raising the U.S. corporate tax rate to 28% from 21%, and the minimum tax on U.S.-based companies\u2019 foreign profits to 21% from 10.5%.&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:paragraph -->\n<p>Signatories&nbsp;for the proposed overhaul&nbsp;include&nbsp;all of&nbsp;the Group of 20 major economies, including China and India.&nbsp;In all, the OECD estimates that&nbsp;governments lose revenue of between $100 billion and $240 billion to tax avoidance each year.&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:paragraph -->\n<p>A broad-based GMT is expected to&nbsp;largely&nbsp;eliminate tax shopping, or the practice of&nbsp;relocating headquarters to lower-tax rate jurisdictions. Multinational corporations \u201cwill no longer be able to avoid paying their fair share by hiding profits generated in the United States, or any other country, in lower-tax jurisdictions,\u201d&nbsp;the Statement says.&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:heading {\"level\":4} -->\n<h4><strong>Digital Taxes<\/strong>&nbsp;<\/h4>\n<!-- \/divi:heading -->\n\n<!-- divi:paragraph -->\n<p>The&nbsp;130-nation&nbsp;deal also&nbsp;includes a framework to eliminate digital services taxes, which targeted the biggest American tech companies&nbsp;(WSJ).&nbsp;&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:paragraph -->\n<p>Taxing digital&nbsp;goods and services has been problematic as each country chooses significantly different rules. In a roundup of practices, the&nbsp;<a href=\"https:\/\/taxfoundation.org\/digital-tax-europe-2020\/\" target=\"_blank\" rel=\"noreferrer noopener\">Tax Foundation<\/a>&nbsp;noted in&nbsp;March,&nbsp;2021:&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:image {\"align\":\"right\",\"id\":8362,\"width\":485,\"height\":474,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-full is-resized\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image.png\" alt=\"\" class=\"wp-image-8362 lazyload\" width=\"485\" height=\"474\" data-srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image.png 485w, https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image-480x469.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 485px, 100vw\" \/><noscript><img decoding=\"async\" src=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image.png\" alt=\"\" class=\"wp-image-8362 lazyload\" width=\"485\" height=\"474\" srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image.png 485w, https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image-480x469.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 485px, 100vw\" \/><\/noscript><\/figure><\/div>\n<!-- \/divi:image -->\n\n<!-- divi:paragraph -->\n<p>About half of all European OECD countries have either announced, proposed, or implemented a digital services tax (DST), which is a tax on selected gross revenue streams of large digital companies. Because these taxes mainly impact U.S. companies and are thus perceived as discriminatory, the United States has responded with\u202f<a href=\"https:\/\/taxfoundation.org\/us-trade-representative-ustr-digital-services-tax-investigations\/\" target=\"_blank\" rel=\"noreferrer noopener\">retaliatory threats<\/a>.&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:paragraph -->\n<p>Because each country\u2019s rules&nbsp;differ significantly, eliminating digital tax&nbsp;entirely simplifies global tax structure.&nbsp;&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/divi:spacer -->\n\n<!-- divi:heading {\"level\":4} -->\n<h4><strong>The Takeaway<\/strong>&nbsp;<\/h4>\n<!-- \/divi:heading -->\n\n<!-- divi:paragraph -->\n<p>While the elimination of the Digital Tax is a win, the implementation of a Global&nbsp;Minimum&nbsp;Tax could significantly increase&nbsp;a company\u2019s&nbsp;tax liability and alter previous tax planning structures put in place. Companies&nbsp;should begin forecasting impacts on their global tax expense and&nbsp;begin to&nbsp;reconsider their transfer pricing approach and structures.&nbsp;<\/p>\n<!-- \/divi:paragraph -->\n\n<!-- divi:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/divi:spacer -->[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":"<p><div class=\"et_pb_section et_pb_section_0 et_section_regular\" >\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div><div class=\"et_pb_row et_pb_row_0 et_pb_row_empty\">\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div><div class=\"et_pb_module et_pb_text et_pb_text_0  et_pb_text_align_left et_pb_bg_layout_light\">\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div> In an effort to&nbsp;root out global&nbsp;corporate&nbsp;tax avoidance,&nbsp;officials from 130 countries agree to&nbsp;a global minimum tax.&nbsp;&nbsp; Treasury Secretary Janet Yellen announced&nbsp;July 1 of this year an agreement by 130 countries&nbsp;to support&nbsp;a&nbsp;U.S. proposal for a global minimum tax&nbsp;(GMT)&nbsp;on corporations. Although&nbsp;not explicitly set,&nbsp;the Biden Administration has pushed for an actual tax rate of at&nbsp;least 15%&nbsp;(WSJ).&nbsp;&nbsp; In a&nbsp;White [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":8363,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"<!-- wp:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:image {\"align\":\"right\",\"id\":8363,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-large\"><img src=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax-1024x536.png\" alt=\"Emerging Global Minimum Tax\" class=\"wp-image-8363\"\/><\/figure><\/div>\n<!-- \/wp:image -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p><em>In an effort to&nbsp;root out global&nbsp;corporate&nbsp;tax avoidance,&nbsp;officials from 130 countries agree to&nbsp;a global minimum tax.&nbsp;<\/em>&nbsp;<\/p><\/blockquote>\n<!-- \/wp:quote -->\n\n<!-- wp:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:paragraph -->\n<p>Treasury Secretary Janet Yellen announced&nbsp;July 1 of this year an agreement by 130 countries&nbsp;to support&nbsp;a&nbsp;U.S. proposal for a global minimum tax&nbsp;(GMT)&nbsp;on corporations. Although&nbsp;not explicitly set,&nbsp;the Biden Administration has pushed for an actual tax rate of at&nbsp;least 15%&nbsp;(<a href=\"https:\/\/www.wsj.com\/articles\/u-s-wins-international-backing-for-global-minimum-tax-11625153698?mod=e2tw\" target=\"_blank\" rel=\"noreferrer noopener\">WSJ<\/a>).&nbsp;&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>In a&nbsp;<a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/statements-releases\/2021\/07\/01\/statement-by-president-joe-biden-on-todays-agreement-of-130-countries-to-support-a-global-minimum-tax-for-the-worlds-largest-corporations\/\" target=\"_blank\" rel=\"noreferrer noopener\">White House Statement<\/a>,&nbsp;President Joe Biden&nbsp;thanks&nbsp;the signatories of the Paris&nbsp;Organisation&nbsp;for Economic Co-operation and Development (OECD)&nbsp;statement, which&nbsp;include&nbsp;90% of the world\u2019s economy.&nbsp;Biden\u2019s proposed&nbsp;<a href=\"https:\/\/www.wsj.com\/articles\/whats-in-bidens-2-trillion-corporate-tax-plan-11617206009?mod=article_inline\" target=\"_blank\" rel=\"noreferrer noopener\">Made in America<\/a>&nbsp;tax plan&nbsp;calls&nbsp;for raising the U.S. corporate tax rate to 28% from 21%, and the minimum tax on U.S.-based companies\u2019 foreign profits to 21% from 10.5%.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Signatories&nbsp;for the proposed overhaul&nbsp;include&nbsp;all of&nbsp;the Group of 20 major economies, including China and India.&nbsp;In all, the OECD estimates that&nbsp;governments lose revenue of between $100 billion and $240 billion to tax avoidance each year.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>A broad-based GMT is expected to&nbsp;largely&nbsp;eliminate tax shopping, or the practice of&nbsp;relocating headquarters to lower-tax rate jurisdictions. Multinational corporations \u201cwill no longer be able to avoid paying their fair share by hiding profits generated in the United States, or any other country, in lower-tax jurisdictions,\u201d&nbsp;the Statement says.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:heading {\"level\":4} -->\n<h4><strong>Digital Taxes<\/strong>&nbsp;<\/h4>\n<!-- \/wp:heading -->\n\n<!-- wp:paragraph -->\n<p>The&nbsp;130-nation&nbsp;deal also&nbsp;includes a framework to eliminate digital services taxes, which targeted the biggest American tech companies&nbsp;(WSJ).&nbsp;&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Taxing digital&nbsp;goods and services has been problematic as each country chooses significantly different rules. In a roundup of practices, the&nbsp;<a href=\"https:\/\/taxfoundation.org\/digital-tax-europe-2020\/\" target=\"_blank\" rel=\"noreferrer noopener\">Tax Foundation<\/a>&nbsp;noted in&nbsp;March,&nbsp;2021:&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:image {\"align\":\"right\",\"id\":8362,\"width\":485,\"height\":474,\"sizeSlug\":\"full\",\"linkDestination\":\"none\"} -->\n<div class=\"wp-block-image\"><figure class=\"alignright size-full is-resized\"><img src=\"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/image.png\" alt=\"\" class=\"wp-image-8362\" width=\"485\" height=\"474\"\/><\/figure><\/div>\n<!-- \/wp:image -->\n\n<!-- wp:paragraph -->\n<p>About half of all European OECD countries have either announced, proposed, or implemented a digital services tax (DST), which is a tax on selected gross revenue streams of large digital companies. Because these taxes mainly impact U.S. companies and are thus perceived as discriminatory, the United States has responded with\u202f<a href=\"https:\/\/taxfoundation.org\/us-trade-representative-ustr-digital-services-tax-investigations\/\" target=\"_blank\" rel=\"noreferrer noopener\">retaliatory threats<\/a>.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Because each country\u2019s rules&nbsp;differ significantly, eliminating digital tax&nbsp;entirely simplifies global tax structure.&nbsp;&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:heading {\"level\":4} -->\n<h4><strong>The Takeaway<\/strong>&nbsp;<\/h4>\n<!-- \/wp:heading -->\n\n<!-- wp:paragraph -->\n<p>While the elimination of the Digital Tax is a win, the implementation of a Global&nbsp;Minimum&nbsp;Tax could significantly increase&nbsp;a company\u2019s&nbsp;tax liability and alter previous tax planning structures put in place. Companies&nbsp;should begin forecasting impacts on their global tax expense and&nbsp;begin to&nbsp;reconsider their transfer pricing approach and structures.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:spacer {\"height\":37} -->\n<div style=\"height:37px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->","_et_gb_content_width":"","spt_transcript":"","footnotes":""},"categories":[228,226],"tags":[750,748,731,749,330],"class_list":["post-8361","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-federal-tax","category-tax-news","tag-biden-tax-plan","tag-digital-tax","tag-global-minimum-tax","tag-gmt","tag-international"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/taxops.com\/wp-content\/uploads\/2021\/07\/Emerging-Global-Minimum-Tax.png","_links":{"self":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/8361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/comments?post=8361"}],"version-history":[{"count":8,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/8361\/revisions"}],"predecessor-version":[{"id":9429,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/8361\/revisions\/9429"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media\/8363"}],"wp:attachment":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media?parent=8361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/categories?post=8361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/tags?post=8361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}