In its latest report published on Tuesday, 21 November, the Organisation for Economic Co-operation and Development (OECD) has revealed that multinational companies continue to report low-taxed profits, even in jurisdictions with high corporate tax rates.
Approximately 37.1% of global net profits, that being USD 2,411 billion out of a total of USD 6,503 billion, are taxed at effective tax rates below 15%. However, 56.8% of all of these profits taxed below 15% are made in high-tax jurisdictions—i.e., a jurisdiction whose statutory and average tax rate is above 15%. This concerns all country groups, regardless of income level. The OECD estimates that 28% of all global low-taxed profits are generated in low- and middle-income jurisdictions.
It is even in high-tax jurisdictions that more than 20% of very low-taxed profits—i.e., those subject to an effective tax rate below 5%—are made. This is likely the result of granting tax incentives and other targeted concessions. The OECD pointed out that this situation highlights the revenue-raising potential of the global minimum tax.
It has thus reiterated the need for global tax reform.
Read the report: https://aeur.eu/f/9n8 (Original version in French by Anne Damiani)