G20, the Global Minimum Tax arrives (and that precedent of our Antitrust)
Emanuela Rossi's article
It is one of the hot topics at the G20 table which begins today in Venice and which brings together the economic ministers and central bank governors of the 20 most industrialized countries until 11 July.
This is the minimum rate of 15% at global level of the tax on multinationals, the so-called Global Minimum Tax , brought to the fore in April by the President of the United States, Joe Biden, and which has already been discussed at the G7 which was held in London in early June.
Just a few hours ago, the US Secretary of State, Janet Yellen, reiterated the importance of discussing the tax after last week the 130 OECD countries gave the green light to the agreement that will redesign the world tax system and it will force big companies – starting with big techs like Apple, Amazon and Facebook – to pay taxes where they operate. According to reports from Reuters, the negotiations on the global minimum tax rate should be completed during the G20 leaders' summit scheduled for October 30 and 31 in Rome.
A FEW NUMBERS TO UNDERSTAND THE PHENOMENON
Charging taxes with a single rate and in countries where income is produced also helps to fight the long-standing battle against tax havens that in 2019 the then new Antitrust president, Roberto Rustichelli, had attacked hard.
That the issue is of some importance is evident by comparing the Eurostat data relating to GDP and per capita income of Ireland, Luxembourg and the Netherlands with those of Italy and scrolling through the figures.
With a population of 600,000 inhabitants, Luxembourg in 2020 can boast a per capita income of 81,290 euros and a GDP of 64.1 billion, an increase of 11% between 2015 and 2020 while in Ireland – with 4, 9 million people in its territory – there is a per capita income of 61,560 euros and a GDP of 366.5 billion (+ 32% in the five-year period). It even rises to 798.7 billion GDP in the Netherlands (+ 5% between 2015 and 2020) against 17.4 million inhabitants and a per capita income of just over 40 thousand euros.
The speech becomes quite different when you arrive in Italy: a population of 59.6 million people who have a per capita income of 24,890 euros and a GDP of 1,651.6 billion, down 5%.
But there are other numbers that make the disparity caused by differences in tax treatment equally clear. We are talking about corporate income taxes for which the OECD provides the data.
Well, in 2019 – the latest time reference available – in Luxembourg they were equal to 5.92% of GDP and in the Netherlands to 3.7%. Ireland is more or less in line with corporate income taxes reaching 3.14% of GDP. As it happens, far from Italy in which two years ago they were equal to only 1.94%.
WHAT RUSTICHELLI SAID
To bring the problem to the fore two years ago, therefore, was the president of the Antitrust, Rustichelli, a few months after his election as head of Piazza Verdi. "First of all, the phenomenon of fiscal dumping carried out by some member countries, which have now become real tax havens – he stressed – is highlighted: this type of unhealthy competition is the result of national selfishness and risks undermining the values that have up to now supported the process of European integration ".
Rustichelli spoke openly of "tax competition put in place by some states such as, for example, the Netherlands, Ireland, Luxembourg and the United Kingdom" which is "used, as noted by the European Commission itself, by multinational companies to forms of aggressive tax planning in place ". Although not an “easy to quantify” phenomenon, some useful data could be deduced from the “Aggressive tax planning indicators” report with which Brussels analyzes the issue and its effects in depth.
From there, the president of the Authority deduced – for example – that "Luxembourg, a country of about 600 thousand inhabitants, is able to collect corporate taxes equal to 4.5% of GDP, compared to 2% in Italy . Ireland (2.7%) also does better than Italy, despite a particularly low rate, which is, however, able to attract highly profitable companies with an average gross operating margin equal to 69.4% of value added. product". In the face of a few countries that gain from it, however, “it is the European Union that loses, given that multinational groups react to tax competition by locating their most profitable companies precisely in European countries with more favorable taxation. This not only drains resources from the economies where value is actually produced, but overall reduces the ability of the community to collect resources, thus preventing a more equitable taxation of corporate profits ”. In Italy, an example of the problem is the "significant economic damage to the State's revenues caused by the recent transfer of the tax office to London of what was the main Italian car company (FCA, ed ), as well as the transfer of the registered office and tax in the Netherlands of its parent company ".
In a nutshell, these are the accounts presented by Rustichelli in July 2019, "tax competition generates negative externalities that cost 500 billion dollars a year globally, with an estimated damage for Italy between 5 and 8 billion dollars. dollars a year ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/g20-arriva-la-global-minimum-tax-e-quel-precedente-della-nostra-antitrust/ on Wed, 07 Jul 2021 13:38:03 +0000.