'Global minimum corporate tax rate: ifs and buts'
More than 130 countries, including the Netherlands, have decided to introduce a minimum corporate tax rate of 15 percent. The plan would lead to 125 billion euro in extra tax revenue globally.
That sounds like good news for the Dutch treasury, but it is doubful whether lots of extra tax billions will indeed get to The Hague. 'There are quite a few ifs and buts’ says Martijn Nouwen, Assistant Professor Tax Law, to Dutch news site Nu.nl. 'It is, of course, a historic step that so many countries have agreed to introduce a minimum rate for corporate tax. And also that companies now have to pay tax in the country where a certain income is actually generated. But there are all sorts of exceptions.'
The 15 percent rate only applies to companies with more than 750 million euro turnover. The rule of paying tax in the country where your turnover is generated, only applies to companies with a turnover above 20 billion dollars (17 billion euro) and a profit margin of minimum 10 percent. Providers of financial services, such as banks, are excluded and around sixty countries have not signed the agreement. That said, Nouwen does not call the agreement a paper tiger. 'The mere fact that there is an agreement is something unique that has taken years to achieve. Besides, it is possible that in the future the exceptions will be adjusted so that the rules will apply to more and more companies.'