OECD calculates losses from the failure of negotiations on global digital taxation
The global economy could lose more than 1% of production if international negotiations to rewrite cross-border tax rules fail and spark a trade war, the Organization for Economic Co-operation and Development (OECD) said Monday after countries agreed to continue negotiations until mid-2021..
On Friday, nearly 140 countries agreed to extend digital tax negotiations, so like a re-flash massive coronavirus infection and hesitation ahead of the U.S. presidential election shattered hopes of reaching an agreement this year.
Public pressure to large profitable multinational corporations in order to pay their share in accordance with international tax rules relentlessly growing as the COVID-19 pandemic has shaken national budgets, states agreed statement.
The main goal is to update international tax rules for the digital commerce era, in particular to discourage large internet companies such as Google, Facebook and Amazon from making profits in countries with low tax rates such as Ireland, regardless of whether where are their clients.
In the absence of a new international rulebook, an increasing number of governments are planning their own taxes on digital services, prompting threats of retaliation from the Donald Trump administration..
«IN «the worst» scenarios these disputes can shorten world GDP by more than 1% », – said the OECD, which led the negotiations on global taxation.
Conversely, the new digital tax rules and the proposed global minimum tax will increase the global corporate tax rate worldwide from 1.9% to 3.2%, or about $ 50-80 billion per year..
According to the OECD, this amount could be $ 100 billion, taking into account the current minimum income tax in the United States overseas, which is 4% of global corporate income tax. Meanwhile, any obstacle to global growth in the long term will be no more than 0.1%.
According to the head of the OECD tax service Pascal Saint-Aman (Pascal Saint-Amans), while countries agreed on OECD plans for a future deal, the key remaining challenge to be addressed was business coverage, which would then facilitate technical negotiation..