Germany approves global minimum corporate tax
Germany approves global minimum corporate tax
The German parliament on Friday approved the implementation of a global minimum corporate tax, as part of an international deal to ensure large companies pay a minimum tax rate of 15%.
Multinational firms will have to pay a minimum of 15% tax on all of the profits they make worldwide, regardless of where the profits are generated.
This is great in theory, but many companies just redirect actual profits back into "expenses" like donations, bonuses, consultancy fees, etc. Whatever writes off more taxes.
This will apply to all such companies and large-scale domestic groups with turnover above 750 million euros ($800 million) per year.
Yeah, OK. If they're doing that kind of turnover the business most certainly has an accounting department and financial "strategy" in place. If Germany wanted to make it real they would have approached it like GDPR fines where it is based on global revenue, not profits.
This looks like political theater to me, and the unanimous party support seems to back that theory, but i don't have enough German ability or the desire to dig further.
That's exactly want this law is stopping. Companies will always try to reduce their tax burden which is why this initiative, a tax floor, is global. The law is an effective way of increasing the minimum tax - what you said doesn't really apply.
Multinational firms will have to pay that level of tax on all of the profits they make worldwide, regardless of where the profits are generated.
If I have understood correctly from the article, this tax seems to apply to profits instead of revenue. If that is the case then all this does is justify companies hiring 10 more accountants and lawyers to find more novel ways to launder real corporate profit from exploitation into personal profit. Publicly traded companies might take a small hit to their next annual reports, but private businesses will experience almost no effect at all.
If a company has bought and "loaned" or given their executives cars, phones, food and rent stipends, paid for lavish parties with
friendsclients, bought out their family's "startup" and put their kids on the payroll, started their own charity that functionally does nothing, and employed people to be their personalbutlerassistant, and contracted out their everything to other friend's businesses, then those are considered "expenses". The actual profit has been "reinvested back into the business" and the tax is applied to what is basically pocket change because the money has been spent. It doesn't matter that the gold toilet in the CEO's personal office bathroom isn't necessary, it still counts as an expense. The core problem persists, the only thing it just changes the numbers on the documents."Reducing tax" is how companies strengthen social imbalance by consolidating power amongst a small group of people and exploit global markets. It's not something to write off as an understandable necessity. This is why GDPR specifically targetted revenue instead of profits as the base value.
But it's late and I may have missed a key phrase or three in the article. That also happens.
All nations are a sham. The new world is coming! Be part of the change for the natural flag of humanity as a whole.
🤖 I'm a bot that provides automatic summaries for articles:
Click here to see the summary
BERLIN, Nov 10 (Reuters) - The German parliament on Friday approved the implementation of a global minimum corporate tax, as part of an international deal to ensure large companies pay a minimum tax rate of 15%.
In 2021 almost 140 countries agreed to an Organisation for Economic Cooperation and Development deal they are meant to implement from next year to prevent big companies like Alphabet's Google (GOOGL.O) or Amazon (AMZN.O) avoiding taxation by transferring profits to low-tax countries.
The increase is expected to raise $220 billion globally for governments strapped for cash after the COVID-19 pandemic and struggling to ride out a cost-of-living crisis, although the ratification process has hit hurdles in various countries.
Last December the European Union member states agreed on a common directive to ensure uniform implementation of the tax within the EU, and that directive must be passed into national law in all EU countries by the end of the year.
The Ministry of Finance estimated earlier this year that additional tax revenue of 910 million euros could be expected in Germany from 2026.
In 2027 and 2028, the tax is forecast to bring in 535 and 285 million euros, respectively.
Saved 26% of original text.
Seems kind of complicated to me. Why don't countries just unilaterally put tarriffs on imports from countries with (corporate) income taxes that are too low, as well as countries that don't also have similar tariffs?
Global tax is complicated. A reprisal tariff regime would be way way way more complicated. The US doesn't want to be in a position where it's levying 50% tariffs on Guinness because Ireland's corporate tax rate is 12.5%. How do you know that tariff is fair and would the WTO even recognize uneven tax rates as a sanctionable offense?
This is a carrot vs stick approach.
Hmmm makes me question the benefit of the WTO.
What will realistically happen?
Nothing. Companies will just spend a hair more money finding ways to circumvent the new taxes. And, if the new taxes were not easily circumvented- they would just relocate the company to another country with lower taxes.
In the end, the consumer is paying the taxes, and not the company itself, either way.
"what's the point of introducing new taxes against the rich? They'll just find ways to avoid it so let's just not do anything that might harm their profit margins or else it'll make the poor even poorer"
Then wtf is the solution? Everybody says this whenever higher taxes for corporations and the rich is brought up, that they'll just find new ways to avoid touching their precious profits. Should everyone just collectively do nothing because "they'll find ways to avoid it so why bother"
This defeatist attitude pisses me off, something needs to be done to curb this bullshit. Literally no one needs or deserves hundreds of millions, let alone billions of dollars, and this cancerous "profits must go up every year or your company is a failure" needs to fucking die already. Why do companies making hundreds of millions to billions of dollars in profit need more fucking money? Why can't being rich af and literally not being able to spend your net worth in a single lifetime be enough?
We went from 1 salary at a factory being enough to raise a family, buy a house, buy a car, and go for a yearly vacation being normal to even 2 highly educated people working together and sharing expenses barely being able to afford a fucking house. Now the average person is expected to give a giant portion of their monthly earnings to pay off some parasitic landlords mortgage plus some profit for the "trouble" of being a fucking parasite.
Eat the fucking rich. Enough is enough.