PARIS, July 15 (Reuters) – Countries applying a global minimum tax on multinational companies saw corporate tax revenues rise without a corresponding loss of jobs or investment, the Organisation for Economic Co-operation and Development said on Tuesday.
The global minimum tax was designed to curb a decades-long race to the bottom in corporate taxation by allowing countries to levy top-up taxes when profits are taxed below 15% elsewhere, reducing the benefits of booking profits in low-tax jurisdictions.
More than 60 countries and territories have implemented the rules, while many others are preparing to do so.
The Paris-based OECD estimated that the tax increased government revenue by €79 billion to €109 billion ($90 billion to $124 billion) in its first year, equivalent to 2.4% to 3.4% of global corporate income tax receipts.
The study examined how companies responded after the introduction in 2024 of the global minimum tax, a cornerstone of international efforts to overhaul corporate taxation and deter large multinational groups from shifting profits to low-tax jurisdictions.
Applying to multinational groups with annual revenue above €750 million, the tax aims to ensure companies face an effective tax rate of at least 15% wherever they operate.
To identify the impact of the reform, the OECD compared firms just above and below the revenue threshold. It found that companies covered by the rules experienced higher effective tax rates, while there was limited evidence of any effect on investment or employment.
Unlike previous OECD estimates, which relied on modelling, the study was based on observed company behaviour following implementation of the rules.
The revenue estimate is below the OECD’s pre-implementation projection that the reform could eventually generate an additional $155 billion to $192 billion a year in corporate tax revenue worldwide, reflecting that the study covers only the first year of implementation.
Since the study covers only 2024, it does not reflect a subsequent agreement negotiated by the Trump administration that exempted U.S.-headquartered multinationals from key elements of the regime through a separate “side-by-side” arrangement that recognises the United States’ existing minimum tax.
($1 = 0.8745 euros)
(Reporting by Leigh Thomas; Editing by Aurora Ellis)
Comments