EU adopts global minimum 15% tax on big business

This isn&#x27;t really as big a deal as it&#x27;s been made out to be, IMO.<p>This is Pillar 2 of the OECDs tax reform for corporations.<p>Pillar 1 is much more interesting, and would require corporations to actually book profits where they are made (so not putting everything through Ireland for example). This will have a much bigger impact imo than this 15% ruling, because right now there are a bunch of tricks you can use to get round any tax rate.<p>For example, even though Ireland&#x27;s headline tax rate is currently 12.5%, the effective rate after all the tricks for many US tech cos was &lt;1% to the Irish state.

&gt; The landmark deal between nearly 140 countries aims to stop governments racing to cut taxes in a bid to attract companies.<p>&gt; It was praised by US Treasury Secretary Janet Yellen as &quot;an historic agreement which helps even the playing field&quot;.<p>This is a global goal, not just an EU Law.

This will be watered down in every way imaginable, escpecially the usual suspects like Malta with a straight up fraudluently advertised 30+ % corporate tax rate ,but they &quot;refund&quot; you everything but 5%, making it an effective 5% tax rate.<p>There is no way Malta will play along, it is a small state abusing all the EU benefits for nefarious purposes and never contributing anything useful.<p>This is just an example, there are many, many more more sophisticated schemes like that, Malta is just doing it openly.

Meanwhile the Swedish government is giving massive incentives to Amazon, Google, Facebook and Microsoft to build data centers (and I assume other countries do too). Almost zero taxing on electricity and actual monetary payouts.<p>In other words, this is a bit of a headline without any actual teeth (there’s plenty of ways to compete unfairly), which is the problem when you start wanting to govern the world, you can’t cover all the bases.

I don&#x27;t really like this kind of idea because it really goes against a kind of fundemental freedom. &quot;If you don&#x27;t like it, you can leave&quot;.<p>Instead, laws around making sure that the profits generated from a countries citizens are taxed by that country make more sense to me. A lot of laws around that already exist, and I suppose a lot of people would say that they have not been effective.<p>A lot of it comes down to the treatment of Intelectual Property. A lot of the tax games that companies play relate to licencing their IP around between different countries. I wonder what would happen if a country tried banning licencing of IP between related parties internationally?

&gt; <i>European leaders praised the decision, with Germany&#x27;s Chancellor Olaf Scholz describing it as a &quot;project close to my heart&quot;. French President Emmanuel Macron said the country had been pushing the idea for more than four years.</i><p>Of course countries with high taxes are all for raising taxes in countries where they are lower!<p>Now, unfortunately the article does not mention the interesting bit, which is that EU countries with lower corporation tax will therefore have to raise their rates. I&#x27;m thinking especially about Hungary and with the current tense relations I&#x27;m surprised that they agreed... What is the deal?

Why businesses are taxed so low but individuals&#x2F;employees so high in EU (35%-65% income tax)?

<i>&quot;The US has not taken steps to adopt the rules so far, despite Ms Yellen&#x27;s championship of the plan.&quot;</i><p>Lol, obviously. Cheering them on as they shoot themselves in the foot

Taxes on corporations to me always seemed rather silly.<p>If there was a tax hike on my business, I&#x27;d automatically hike prices by 15%. This is what businesses are <i>supposed</i> to do. You buy shoes for your shoe store, you mark up the price, you can&#x27;t sell them for what <i>you</i> bought them for. You hire an extra person, you raise the price of your goods or services. Oil prices go up? Gas stations raise the price of a gallon of gasoline. You have to pay extra taxes, you raise the price of your goods or services. It&#x27;s always the customer who pays that extra 15% tax. It has to be that way, how else could it be?

I’m not an Economist, but doesn’t such a tax lower a firm’s ability to pay its employees (by hiring more or increasing wages) or decrease the firm’s ability to pay dividends to shareholders or force the firm to raise prices.<p>Generally, it seems like a way to collect more revenue from the population while hiding it as an indirect tax. And it seems a bit like a regressive tax that hits everyone. The fact that they want it to be global makes me feel that they don’t want to compete with other countries that may have “better” economic policies -— whatever that would mean.

Did I miss it in the article or was there no mention of where the cutoff is for &quot;big&quot; businesses? Or does it apply to all businesses?

&gt; &quot;Today the European Union has taken a crucial step towards tax fairness and social justice,&quot; EU economy commissioner Paolo Gentiloni said.<p>There is a saying in Poland: &quot;The difference between &lt;&lt;justice&gt;&gt; and &lt;&lt;social justice&gt;&gt; is the same as the difference between &lt;&lt;a chair&gt;&gt; and &lt;&lt;an electric chair&gt;&gt;.<p>I wish we would actually listen to the those countries, when it comes to topics like socialism and communism. Though I suspect the Western European countries need to taste that themselves first to be able to understand what that means.

Bigger tax for bigger business. Fair enough.

You can&#x27;t use &quot;EU&quot; and &quot;global&quot; in the same headline here, BBC.

Next question: who will get this money, and what do they plan to do with it?