Global tax reform postponed to July 2023

“Undo for a better blast” : On July 15-16, in Bali, the G-20 finance group, which will bring together the finance ministers of the 19 richest countries plus the European Union, should endorse this wise quote. It should fix, in July 2023 instead of October 2022, the completion of the “first pillar” of global tax reform designed by the Organization for Economic Co-operation and Development (OECD) – this financial mega-burst that should neutralize tax havens and more equitably distribute the tax of the largest multinational corporations among North and South.

It is indeed a wish “comprehensive framework” From the Organization for Economic Co-operation and Development, this group of 140 countries where reform is being discussed and who have just voted in principle. The announcement of this new calendar appears in A report on taxation by the OECD Secretary-General” – Matthias Corman, former Australian Finance Minister (2012-2020), in office since June 2021 – which will be delivered to G20 Ministers assessing major projects and developments.

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What is tangible? While the “second pillar” of this reform is ready for deployment and relates to creating a global minimum tax of 15% (instead of currently 0% in tax havens), this “first pillar” should complement and establish fair rules for sharing the huge taxes – the profits they have made Multinational corporations, between their home country (the country of the head office) and those in which they actually make their profits (the countries where their markets and customers are located).

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This is, in short, to introduce tax justice into the system. In fact, mega-projects correspond to the recorded profits exceeding a certain limit and considered as excess profits that can be shared. However, if Pillar One writing is well advanced, there is a major hurdle standing in the way of its possible adoption, in October, at the global level: the US midterm elections, scheduled for the following month in the US. States, which creates political uncertainty and makes the vote on the text across the Atlantic uncertain.

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So, according to the project’s architects, it is best to stick to the American giant’s agenda, support basic reform, and opt to postpone it until mid-2023. In doing so, the OECD intends to use the next eight months to try to get a positive vote in the US Congress and legally secure the reform bill. Thus, a detailed eighty-page document, evaluating the work already carried out on the rules of engagement that constitutes this “first pillar”, is submitted for public consultation, in a transparent manner, until August 19.

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