Global tax reform: end of tax havens?

The meeting of finance ministers of the G7 countries which ended on Saturday 5 June should lead to the introduction of a global tax rate for multinationals of at least 15% provided this project is endorsed by the G20 during the Venice summit, July 9 and 10. The return of the United States to multilateral negotiations made this compromise possible, which is also supported by the OECD. Until now, the majority of large companies use tax havens (Ireland, the Netherlands, Cayman Islands, etc.) to “domiciliate” their profits. This tax deal is expected to affect the 100 largest and most profitable multinationals in the world. It is in particular the famous GAFA (Google, Apple, Facebook and Amazon), but not only, which are targeted by this tax reform. The financial stake for states is enormous. Indeed, according to the OECD, nearly 150 billion dollars could return to the different States with the “step 2” of this reform. The principle is that companies domiciled fiscally in tax havens (zero taxes) will have to pay in the countries where they are located (taxes on profits) the difference between what they should have paid and what they pay in the countries where they are located. The Covid crisis is obviously not unrelated to this compromise, because digital companies have generated record profits last year, often untaxed, while states have spent lavishly to keep economies afloat. Obviously, countries like Ireland, which has a tax rate of 12.5%, are opposed to this reform. In addition, companies like Amazon, whose profitability is less than 10% (6.3% in 2020), could escape this new tax despite a profit of 8.1 billion in the first quarter of 2020 alone …