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Old 02.07.2021, 11:10
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Are tax havens doomed?

130 countries, which is pretty significant, have agreed to a global min tax. And more may soon be joining the band wagen.
Where is a tech giant to go? Now I understand why Bezos and Musk are so keen on Mars.
https://www.theguardian.com/business...corporate-rate
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Old 02.07.2021, 11:22
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Re: Are tax havens doomed?

Ireland, Hungary and Estonia?

If companies fix prices they get prosecuted for anti-competitive behaviour as Cartels (unless it's OPEC). Governments are allowed to get away with it though and people celebrate this as a good thing
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Old 02.07.2021, 11:24
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Re: Are tax havens doomed?

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130 countries, which is pretty significant, have agreed to a global min tax. And more may soon be joining the band wagen.
Where is a tech giant to go? Now I understand why Bezos and Musk are so keen on Mars.
https://www.theguardian.com/business...corporate-rate
Of those 130 countries almost all have corporation tax above 15% so I don't see any major change. Since any profits are stuck in the tax haven there is a lot more noise than reality here.
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Old 02.07.2021, 11:25
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Re: Are tax havens doomed?

Hope so - it will mean the end of the NGO industry in Ireland - 5.5bn euro per year and counting.
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Old 02.07.2021, 11:29
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Re: Are tax havens doomed?

Well, this is a boom for accountants, lawyers and anyone that can help to further optimize the tax bills whatever laws apply.
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Old 02.07.2021, 11:52
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Re: Are tax havens doomed?

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130 countries, which is pretty significant, have agreed to a global min tax. And more may soon be joining the band wagen.
Where is a tech giant to go? Now I understand why Bezos and Musk are so keen on Mars.
https://www.theguardian.com/business...corporate-rate
Would have been an issue for CH as well if the min was set lower than 15%. Having said that the implementation of this will take years.
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Old 02.07.2021, 12:46
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Re: Are tax havens doomed?

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Of those 130 countries almost all have corporation tax above 15% so I don't see any major change. Since any profits are stuck in the tax haven there is a lot more noise than reality here.
I would suggest that the main problem is the currently accepted holding company structure of classic multinationals being allowed to “freely” transfer a specific country’s profit to their home base and receive preferential treatment there. Under a somewhat fairer tax regime, all countries would have to apply the same rate at source before any after tax profit could be transferred. Clearly, local issues like high level corruption are not touched by such idealistic measures.
My understanding of the current "noise" is that the big tech companies have perfected the art of tax avoidance to such a high degree that even countries which were previously happy with the arrangements with MN are beginning to question the accepted wisdom.
Don’t think that profits are stuck in tax havens forever
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Old 02.07.2021, 12:50
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Re: Are tax havens doomed?

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Don’t think that profits are stuck in tax havens forever
They are stuck until you want to do something with them such as pay out dividends to shareholders & then corp tax at the full rate will be payable. It's a bit like money in a pension scheme, it's stuck there so not as useful as money you can put in your pocket tomorrow.

I seem to recall that Amazon is not caught up as their margin on internet sales is too low, the level is in the detail not the 15% headline rate.
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Old 02.07.2021, 13:24
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Re: Are tax havens doomed?

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They are stuck until you want to do something with them such as pay out dividends to shareholders & then corp tax at the full rate will be payable. It's a bit like money in a pension scheme, it's stuck there so not as useful as money you can put in your pocket tomorrow.

I seem to recall that Amazon is not caught up as their margin on internet sales is too low, the level is in the detail not the 15% headline rate.
Let’s leave tax havens aside for the moment – after implementation of 15 % worldwide, there wouldn’t be any, right
Any thoughts on yesterday’s Reuters https://www.reuters.com/article/glob...-idUSL2N2OD26C

Donohoe said he supported “Pillar One” which proposes a re-allocation of a proportion of tax to the country where the profit is earned, as it would “bring stability and certainty to the international tax framework.” => why a proportion? 15 % local tax – free transfer of after tax profit to company HQ

But he told journalists he objected to the minimum rate contained in “Pillar Two” and would “continue to make the case on issues that matter to Ireland.” He declined to say what those issues were. => issues? Ireland wouldn’t be that attractive for big tech company “HQ” anymore?

Last edited by LtSoftDrink; 02.07.2021 at 15:33. Reason: include quote
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Old 02.07.2021, 14:15
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Re: Are tax havens doomed?

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Would have been an issue for CH as well if the min was set lower than 15%. Having said that the implementation of this will take years.
The article linked says October.
Would be very surprising, if they really mean in 4 months.

It sounds so wonderfully social, doesn't it. How nice of the biggies (who charge more than 15% tax) to think of all these poor tax havens and help them make more money.

<<The principle of the agreement is that multinationals would be forced to pay a minimum of 15% tax in each country they operate in.>> is a bit confusing. If that means it does no longer matter where the head-quarters are and income is only taxed where it's made, it could be a good thing. But of course only if the 15% is not only the minimum but also the maximum all over the world.
As I understand it, the biggies (who are clearly not able to handle money and all this won't change that fact) want to keep charging high taxes and force the few others to demand a minimum tax. Bullying much?

Maurer - who's bloody good at his job - apparently hasn't even commented on the latest of this yet.
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Last edited by curley; 02.07.2021 at 15:51. Reason: typo
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Old 03.07.2021, 00:25
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Re: Are tax havens doomed?

Switzerland is saying "yes but".


This could affect all payers into Pillar 2, not just corporations:
https://home.kpmg/ch/en/blogs/home/p...nimum-tax.html


And this could affect the balance of tax rates between cantons: https://www.swissinfo.ch/eng/global-...perts/46681310
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Old 03.07.2021, 14:06
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Re: Are tax havens doomed?

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I seem to recall that Amazon is not caught up as their margin on internet sales is too low, the level is in the detail not the 15% headline rate.
https://www.theguardian.com/business...corporate-rate

The Guardian doesn’t mention the low 10 % margin for merchants you cite but according to NZZ (paywall) a “Lex Amazon” should be included…

"....At the beginning of the planned reform was the idea of certain large countries to generate tax revenues from the largest US technology corporations à la Google, Apple, Facebook and Amazon, even if these corporations do not have local sites. The project has grown far beyond that idea. But the four U.S. corporations mentioned are now likely to be covered by the redistribution plans, according to observers. The biggest question mark was Amazon, whose business as a retailer does not meet the 10% margin threshold. The remedy was a "Lex Amazon." According to this week's OECD statement, it is possible in "exceptional circumstances" for only individual business segments to be considered instead of entire groups. This rule is reportedly intended to ensure that Amazon's profitable business with web services (cloud computing) is covered."

Translated with www.DeepL.com/Translator (free version)
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