Economy

OECD proposes giving countries right to tax multinationals' global profits

OECD proposes giving countries right to tax multinationals' global profits”

A study by the Tax Justice Network found that the OECD proposals, created to limit the scope of multinationals to avoid tax, could end up shrinking the tax paid in poorer countries.

The issue has become particularly big in the European Union, where multinationals with business across the continent pay taxes nearly exclusively in the EU country where their local headquarters are based, often a low-tax jurisdiction like Ireland, Luxembourg or the Netherlands.

The OECD said in a statement that its proposal would help the talks to "ensure large and highly profitable multinational enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits".

"The current system is under stress and will not survive if we don't remove the tensions", OECD head of tax policy Pascal Saint-Amans told journalists.

The overhaul would have an impact of a few percentage points of corporate income tax in many countries with no big losers apart from big global investment hubs, Saint-Amans said.

Multinationals like Google and Facebook can reduce their tax burdens by filing in low tax countries like Ireland.

More news: 'Apex Legends' will bring back solo mode in a Halloween event

This year it imposed its own tax on digital giants, drawing the ire of US President Donald Trump even though Paris has vowed to scrub the levy once a global accord is in place. The EU has ordered Apple to pay Ireland nearly $15 billion in back taxes, for example, after finding that their tax deal was unfair because it was better than what other regular companies could expect.

Countries such as France have been pushing for stricter rules which would force the tech giants to pay more tax.

The rise of big internet companies like Google and Facebook has pushed existing tax rules to the limit as such firms can legally book profit and park assets like trademarks and patents in low-tax countries like Ireland regardless of where their customers are. The initiative primarily addresses digital companies, which can have significant market share in countries without a physical presence and as a result escape corporate taxation.

Companies meeting those conditions would then be liable for taxes in a given country, according to a formula based on set percentages of profitability that remain to be negotiated.

After Washington, broader negotiations will get under way with the aim to put an outline agreement to the 134 countries that have signed up for the reform in January.

The U.S. says France's move unfairly targets American companies, but the French government says it will stick with the tax unless there is a global solution at the OECD.



Like this

loading...
loading...

Latest


09 October 2019
SRK’s episode with David Letterman on October 25
Letterman said, "The best part of this job that Netflix has been happy to provide for me is to meet people. The legendary talk show host is seen with Shah Rukh around his house during the Eid time in the video.

09 October 2019
Zlatan Ibrahimovic unveils shirtless giant statue of himself erected in his hometown
Zlatan Ibrahimovic chose to give all the kids in his hometown of Malmo , Sweden , the day off school Tuesday to attend the unveiling of a statue in his likeness.

09 October 2019
White House rules out cooperation in Trump impeachment probe
He had no diplomatic experience, U.S. media report, before Mr Trump nominated him to his position as ambassador in May. He spoke to Trump in September as diplomats raised questions about why security aid to Ukraine was being withheld.

09 October 2019
Rajnath Singh to Perform 'Shastra Puja' After Receiving First Rafale Jet
Singh had on Tuesday received India's first Rafale jet from France, at a ceremony in Paris , and flew a sortie in it. Dressed in a G-suit, Rajnath took to the cockpit of a twin-seater trainer version of the Rafale jet .

09 October 2019
Lakers' NBA Cares event in Shanghai canceled amid China rift
Chinese companies began abandoning the Rockets and TV networks said they would not show Rockets games in China. Houston owner Tilman Fertitta was at pains to emphasise that Morey had not spoken on behalf of the franchise.

09 October 2019
Kyle Larson wins playoff to race at Dover to advance
It was Larson's sixth career NASCAR triumph but more importantly, it secured a spot in the Round of 8 in the playoffs. The second part of the NASCAR playoffs begins in Dover, with 12 drivers remaining in the hunt for a championship.

09 October 2019
NYC Teen Becomes First New Yorker To Die From Vaping
The boy was taken to Montefiore Medical Center in the Bronx where he was pronounced dead. He was re-admitted in late September and died on Friday, Oct. 4.

09 October 2019
A lady assassin will lead the next 'John Wick' movie
The movie centres on a young female assassin who seeks revenge against the people who killed her family, reported Deadline . Wiseman is repped by CAA, Hatten by Lee Stobby Entertainment.

09 October 2019
Oh Hell, Doom Eternal Will Not Be Launching This Year After All
Doom Eternal developer id Software announced Tuesday the game's release date will be delayed to March 20, 2020. The game is instead shifting to a March 20 release date on PC, PS4 and Xbox One.

09 October 2019
Manchester United Battle Madrid For Donny Van de Beek
Manchester United have consistently backed Solskjaer to turn things around and accept any rebuild will need to be done over the long-term.