On June 8, 2021, Friedemann Thomma was quoted in the Wall Street Journal on a new proposal from the G7, which comprises Canada, France, Germany, Italy, Japan, the UK, and the United States, to impose a minimum levy on multinational corporations and rewrite the rules governing how countries tax them.
According to the article, one pillar of the proposal relies on each country passing laws to ensure that companies headquartered there pay a minimum tax of at least 15% in each of the nations in which they operate. Companies that pay less would make up the difference to their home countries.
Assuming a 15% base rate prevails, everything would depend on how each country implements it, said Thomma. Smaller countries especially will have every incentive to find ways to keep their tax codes hospitable.
“In my mind, this proposal is not revolutionary, does not change our thinking for multinationals, and I don’t think it will move the needle with regard to the effective tax rate of global companies,” Mr. Thomma said. “It will all depend on the ultimate implementation of that broad principle.”
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