6 ms·
The complexity of this agreement and its execution are incredible. Not only getting alignment from 130 members, but a system by which companies report their rev
by ppeetteerr 5y ago
The complexity of this agreement and its execution are incredible. Not only getting alignment from 130 members, but a system by which companies report their revenue _and the cost of the revenue_ for every country! Future tax avoidance schemes will most likely try to "divert" their costs towards high-revenue countries like the US. After all, what is the profit margin of an iPhone sold in Romania?
For some context, corporate tax makes up around 7% of the US's federal revenue. While this legislation is important, it's a fraction of the overall revenue pie.
- colechristensen 5y agoHow much revenue is "missing" due to tax magic?
- rebelos 5y agoA lot. Changes in policy cut the effective corporate tax rate down from ~40% around 1950 to where it is today. Lyn Alden covered this in an excellent post: https://www.lynalden.com/tax-shift/ https://www.lynalden.com/tax-shift/.
- nabla9 5y agoYou are mistaken. It's not that complicated and does not work that way. 1) No foreign country is required to collect minimum tax. 2) If some country is not collecting minimum tax, home country tops up the tax until minimum tax requirement is fulfilled. 3) It's up to the company to show evidence that it paid minimum tax in other countries so that it's not double taxed in country where it's hq is. 4) They need to report taxes in other countries only to their home countries.
- ppeetteerr 5y agoThanks for clarifying