The digitalisation of the global economy has exposed the limitations of the traditional tax system. Even as governments grapple with the challenge of maximising tax revenues in the wake of the pandemic, there has been a number of measures to increase tax revenue from large multinational companies. Among such measures, the most noteworthy is the recent move by G7 finance ministers to institute a global minimum tax rate.
At IQ-EQ we wanted to put this significant development under the microscope in terms of understanding the main timelines, studying its key implications, as well as evaluating any potential ramifications for investment hubs.
With this intent, we have invited Capital Economics, an award-winning independent economic analysis, forecasting and consultancy firm, to undertake the in-depth research and analysis needed to form the basis of a comment piece on this topical theme.
This article seeks to elaborate on the factors powering this international tax reform including the two ‘pillars’ that make up this momentous agreement, the ambitious deadlines that this multilateral corporate tax deal is striving to meet, and the scope of such a tax reform across various categories of multinational corporations and different investment hubs. In doing so, we hope to foster understanding and stimulate debate on whether a global minimum tax rate of 15-20% would indeed be a game changer for the global economy.
Our Corporate Team has also conducted a deep dive on this new measure and we would be pleased to assist you in assessing its potential impact on your businesses and guide you throughout the process if your business is deemed to be impacted.
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