What are the implications of the global minimum tax policy?.

The global minimum tax policy, established to prevent profit shifting and ensure fair taxation of multinational corporations, has several key implications:

Key Facts

• The OECD introduced the policy in 2021, aiming for a 15% minimum tax rate.
• Over 140 countries have agreed to implement this framework.
• It targets large corporations with revenues exceeding €750 million.
• Expected to generate over $150 billion in additional global tax revenues annually.

Examples or Use Cases

• Companies like Google and Amazon may face higher tax burdens in countries adopting this policy, potentially adjusting their pricing strategies accordingly.
• Smaller nations that previously attracted corporations with lower tax rates may find their tax revenues stabilizing or increasing.

FAQs

Q: How does the global minimum tax affect small businesses?
A: It primarily targets large multinationals, but indirect effects may influence small businesses' competitive landscape.
Q: When will the global minimum tax take effect?
A: The implementation timeline varies by country, with many aiming for 2024 or 2025.