” Back off to better blow up “ : on July 15 and 16, in Bali, the finance G20, which will bring together the finance ministers of the 19 richest countries plus the European Union (EU), should endorse this wise quote. It should fix, in July 2023 instead of October 2022, the finalization of “pillar one” of the global tax reform designed by the Organization for Economic Co-operation and Development (OECD) – this fiscal big bang which must neutralize tax havens and distribute more equitably the tax of the largest multinationals between North and South.
It is indeed the wish of the “inclusive framework” of the OECD, this group of 140 countries where reform is being discussed and which has just voted in principle. The announcement of this new calendar appears in the ” Report on taxation by the Secretary General of the OECD” – Mathias Cormann, the former Minister of Finance (2012-2020) of Australia, in office since June 2021 – which will be given to the ministers of the G20 and which takes stock on current projects and major advances.
What is it concretely? While “pillar two” of this reform is ready for deployment and concerns the creation of a global minimum tax of 15% (instead of 0% currently in tax havens), this “pillar one” must complete and set fair rules for sharing the mega-profits made by the multinationals, between their country of origin (that of their head office) and those where they really make their profits (the countries where their markets and their customers are located).
Size obstacle
This is, in short, to introduce tax fairness into the system. The megaprofits correspond, in fact, to the profits recorded beyond a certain threshold and considered as excess profits, which can be shared. However, if the writing of the “pillar one” is well advanced, a major obstacle stands in the way of its possible adoption, in October, at the world level: the American mid-term elections, scheduled for the following month in the United States, which create political uncertainty and make the vote on the text across the Atlantic uncertain.
It is therefore better, according to the architects of the project, to stick to the agenda of the American giant, essential support for the reform, and to opt for a postponement to mid-2023. In doing so, the OECD intends to take advantage of the next eight months to try to obtain a favorable vote in the American Congress and legally secure the reform project. Thus, a detailed eighty-page document, taking stock of the work already carried out on the sharing rules making up this “pillar one”, is submitted for public consultation, in a transparent manner, until August 19.
You have 49.67% of this article left to read. The following is for subscribers only.