World tax at 15%: “A fiscal Emmental with many holes”

After the announcement on Saturday by the G7 finance ministers of the plan to tax multinationals where they provide their services and not only in their country of domicile, it only took a few hours for the first criticisms to appear. In particular the fact that Amazon would escape tax, because its profit margin of 6.3% in 2020 is lower than the floor of 10% from which this taxation by so-called market countries would come into effect. A source close to the negotiations was quick to point out that a solution had been found: Amazon’s IT services division would be taxed because it achieves a margin of around 30%. Is this solution really possible? Are there other flaws in the tax reform project?

The project presented on Saturday also provides for a tax rate of at least 15% for multinationals making more than 750 million euros. But nothing says that a uniform and effective taxation will emerge from it, estimates the Geneva tax expert Thierry Boitelle: “This reform sends a strong signal but it is especially a tax emmental with many holes. Finding an agreement on the 15% rate is fine, but there is no point in talking about it if we do not define the tax base. ” However, the latter has never been harmonized at the level of the 38 member countries of the OECD and the tax reform project will also have to be approved by the “inclusive framework” of the organization, which includes 139 countries.

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