Portugal could raise $100 million this year with a minimum IRC of 15% for multinationals – Executive Digest
Portugal would raise an additional 100 million euros in 2021 with the implementation of the agreement in the Organization for Economic Cooperation and Development (OECD) of a minimum tax rate of 15% for multinational companies, according to a study released today.
The conclusion comes from the Fiscal Observatory of the European Union (EU), an independent body on community taxation, which in a report released today and to which Lusa had analyzed the “Effects of the Minimum Global Tax on revenue”, with a report by country, in following the consensus reached at the OECD in early October and which is expected to enter into force within two years.
As far as Portugal is concerned, this minimum IRC of 15% would be equivalent to 100 million euros in additional income from corporate tax in 2021 (this in a scenario of no change in the tax law), corresponding to 1% of current profits with charging to multinationals in the country, according to the EU Fiscal Observatory.
Out of the 27, “we see that EU member states earn an additional €80 billion in corporate tax revenues from a global minimum tax,” notes the body in the report.
This amount “represents about a quarter of current corporate income tax receipts”, notes the observatory.
In early October, 136 countries and jurisdictions agreed on the rapid implementation of a reform of the international corporate tax system, committing to the implementation of a 15% minimum corporate tax rate for multinational companies from 2023.
In view of the consensus, the Fiscal Observatory created simulations of the effects of the 15% global minimum tax established on revenues, basing its analysis on the most recent country reporting statistics released by the OECD.
“We found that high-income countries are the ones that earn the most with the global minimum tax of 15%, because the majority of multinational companies are based in high-income countries”, highlights this entity.
In addition to the EU, other countries were also considered, such as the United States, which would earn around 57 billion euros per year with this minimum IRC of 15%.
In turn, revenue gains will be smaller in countries considered to be developing, such as China (six billion euros), South Africa (four billion euros) and Brazil (1.5 million euros) , says the document, which Lusa had access to.
For several years, the OECD has been discussing a proposal regarding taxes adapted to a globalized and digitalized economy, therefore, it demands taxes from multinationals, which pay them where it is most favorable to them.
Last July, the G20 reached an agreement on the implementation of a new tax mechanism for multinational companies, covering 130 countries and jurisdictions.
Earlier, in June, the G7 finance ministries reached an agreement to implement a minimum 15% tax on corporate profits, including multinationals.
Many countries have been advocating, within the OECD, a global minimum tax of 25%, but in late May the US administration proposed a 15% rate.