New analysis from the OECD predicts that the Pillar Two global minimum tax will result in annual global revenue gains of around $220bn, or 9% of global corporate income tax revenues – a significant increase over the OECD’s previous $150bn estimate.
Pillar One is now expected to allocate taxing rights on about $200bn in profits to market jurisdictions annually, compared to previous estimates of around $125, with low and middle-income countries ‘expected to gain the most as a share of existing corporate income tax revenues’.
The new estimates on the economic impact of the two-pillar solution are based on updated data and incorporate most of the recently agreed design features included in the Amount A Progress Report and the GloBE model rules, many of which had not been accounted for in other studies, says the OECD.
Mathias Cormann, OECD secretary-general, said: ‘This new economic impact analysis again underlines the importance of a swift, efficient and widespread implementation of these reforms to ensure these significant potential revenue gains can be realised. Widespread implementation will also help stabilise the international tax system, enhance tax certainty and avert the proliferation of unilateral digital services taxes and associated tax and trade disputes, which would be bad for the global economy and economies around the world.’
New analysis from the OECD predicts that the Pillar Two global minimum tax will result in annual global revenue gains of around $220bn, or 9% of global corporate income tax revenues – a significant increase over the OECD’s previous $150bn estimate.
Pillar One is now expected to allocate taxing rights on about $200bn in profits to market jurisdictions annually, compared to previous estimates of around $125, with low and middle-income countries ‘expected to gain the most as a share of existing corporate income tax revenues’.
The new estimates on the economic impact of the two-pillar solution are based on updated data and incorporate most of the recently agreed design features included in the Amount A Progress Report and the GloBE model rules, many of which had not been accounted for in other studies, says the OECD.
Mathias Cormann, OECD secretary-general, said: ‘This new economic impact analysis again underlines the importance of a swift, efficient and widespread implementation of these reforms to ensure these significant potential revenue gains can be realised. Widespread implementation will also help stabilise the international tax system, enhance tax certainty and avert the proliferation of unilateral digital services taxes and associated tax and trade disputes, which would be bad for the global economy and economies around the world.’
