The OECD is promoting the implementation of a 'Google Tax' that seems to satisfy all parties.
By surprise, the OECD has announced its global tax proposal that would put an end to the so-called 'Google Tax' and would give way to a new tax figure that would force any multinational service company, not just digital ones, to pay taxes in those countries where it performs business and not only where it has its fiscal headquarters.
The idea is that those international groups of companies whose level of consolidated profits worldwide exceeds the average profitability would have to pay this global tax, the amount of which would later be distributed among the countries where their clients reside. It would be necessary to define how said average profitability will be determined and how it will be distributed among the beneficiary countries, but the music of this new tax is liked by many and it could be a reality as early as 2020.
On the one hand, the Trump Administration has declared itself in favor of this proposal given that it no longer only focuses on the technological giants, most of which are American. On the other, the large European economies see their demands to be able to tax finally part of the profits generated within their borders and that, until now, are fully declared and taxed in a third country with less tax pressure. In this sense, not only France and the United Kingdom, which are already applying this rate, but also Germany, Spain and Italy would benefit from this new measure to the detriment of other countries such as Bulgaria, Ireland or Cyprus with a much higher Corporate Tax. minor.
For their part, the multinationals have not opposed the new world tax either, first of all, because transfer prices would be maintained, those payments that subsidiaries pay to their parent companies and that, until now, have allowed artificially transferring the benefits of the countries market to the countries where their corporate headquarters reside. And, secondly, because in general it would not mean an increase in its tax burden but a new distribution of what is collected from its extraordinary benefits among a more significant number of countries.
So it is an agreement that would allow fairer international taxation and would end unfair competition from corporations that manage to pay less taxes by taking advantage of the globalization of the economy. Come on, everyone would be in favor of global equity, someone pinch me.
