Judge « Utopian » a few years ago, the world minimum tax could see the light of day… from the G7 in July 2021. To believe some the words of Pascal Saint-Amans, senior manager within theOrganization for Economic Cooperation and Development (OECD), the work of the OECD on the subject was already “ very advanced “; only the ” political leadership Was lacking… until the change of president in the United States radically changed the situation.
In recent weeks, the administration of Joe Biden seems to have decided to seize the file. In a speech delivered in early April to the Chicago Council on Global AffairsFormer US Federal Reserve Chairman Janet Yellen, now Secretary of the Treasury, spoke in favor of this proposal, which according to her would make it possible to do ” to thrive the global economy on the basis of a more level playing field in the taxation of multinationals “By stimulating” innovation, growth and prosperity “. Very big words which do not say much about the concept, or the conditions of its implementation, and even less of its concrete implications on the populations. Small update.
What is a minimum world tax?
As the name suggests, introducing a minimum corporate tax on a global scale would mean that all countries in the world – or failing that, the vast majority of them – agree on a rate. minimum corporate tax.
With this new system, “ each country would keep its sovereign right to set the tax rate it wishes, but, if this is lower than the world minimum tax, others will take care of collecting the tax loss in its place. “, abstract The world. In other words: the States would then recover the difference between the tax invoiced abroad by their national companies and that which they should have paid on their soil. A puzzle of fiscal surveillance in perspective? No doubt, but ” instead of competing with who will lower their tax rates the most, countries would compete with each other by increasing public spending on infrastructure, investing in access to education and funding research “, Wants to believe Gabriel Zucman, professor at the University of Berkeley and co-author, with Emmanuel Saez, of Triumph of injustice (Threshold, 2019), in which he called for the implementation of the measure.
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Defining a minimum tax rate common to all countries would also make it possible to harmonize tax rules that have been relaxed for decades. According to the American think tank Tax Foundation, the average corporate tax rate (IS) fell below 24% in 2020, while it was over 40% in 1980.
At what level will the threshold be located?
Obviously, it remains to be seen at what level to situate the threshold for this minimum tax. On this point, the question is far from settled. If the European Commissioner for the Internal Market Thierry Breton welcomed the American proposal to set the floor at 21%, there is no consensus on the figure. France, whose tax rate must be lowered to 25% by 2022, until then argued for an overall minimum rate of income tax of 12.5%, which corresponds for example to that in place in Ireland. More generally, many European Union countries which present themselves – more or less openly – as tax havens display rates lower than this 21%: Hungary, Lithuania, Slovenia, etc.
For their part, economists Emmanuel Saez and Gabriel Zucman suggested in the The Triumph of Injustice to set this threshold at 25%. ” If the G20 countries imposed a 25% floor rate tomorrow on their multinationals, 90% of global profits would immediately be effectively taxed at 25% or more », They explained then. And that would lead ” to make obsolete the development model of tax havens », assures today Gabriel Zucman.
Why is the Biden administration in favor of this measure?
Across the Atlantic, as we can imagine, the idea is not entirely disinterested since, as recalled Reuters agency, this reform project is one of the pillars of the US infrastructure renovation plan – set at $ 2 trillion. To be able to finance it, Joe Biden wants to raise the rate of his own national tax on companies to 28% (against 21% currently), while removing certain deductions associated with profits made abroad. Fearing that these measures would encourage American firms to relocate their profits to avoid higher taxes, the Biden administration therefore proposed a sort of “compromise” to other countries.
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