A Global Minimum Tax for Multinational Companies
With the purpose of discouraging multinationals from shifting profits to low tax countries, G7 Finance Ministers as represented by the wealthy nations which consists of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and the European Union committed to impose minimum
taxes on multinationals companies.
The new rules regarding global minimum taxes are summarized below:
➢ Introducing a global minimum tax of at least 15% on a country-by-country basis.
➢ Providing more authority to countries for taxing profits of cross-border digital services such as Apple, Google, and Facebook by allocating new taxing rights to countries where customers are located.
➢ MNEs with global turnover above €20 billion, which will be reduced to €10 billion after 7 years contingent on success implementation, will be taxed on 20-30% of profit exceeding a 10% margin.
This revenue will be shared among governments.
The US proposed a penalty for companies from countries that do not impose the minimum tax.
Legal Insight Vol. June 2021 of Bangkok Global Law
The PDF file can be downloaded via the link as set below.