La Jornada: Minimum tax on multinationals increases countries’ income, says the OECD

Paris. Countries that apply a global minimum tax on multinational companies have seen corporate tax revenues grow, without any loss of jobs or investment, says the Organization for Economic Co-operation and Development (OECD).

The global minimum tax was designed to stop a decades-long race to the bottom on corporate taxes, allowing countries to apply top-up rates when profits are collected at less than 15 percent elsewhere, reducing the benefits of accounting for profits in low-tax jurisdictions.

More than 60 countries and territories have implemented the rules, while many others are preparing to do so.

The OECD estimated that the low tax increased public revenue between 79 billion and 109 billion euros ($90 billion and $124 billion) in its first year, equivalent to between 2.4 and 3.4 percent of global corporate tax revenue.

The study examined how companies responded following the introduction of the global minimum tax in 2024, a cornerstone of international efforts to reform corporate taxation and discourage large multinational groups from shifting their profits to low-rate jurisdictions.

The tax that applies to multinational groups with annual revenues of more than 750 million euros ($860 million) is intended to ensure that companies face an effective rate of at least 15 percent, regardless of where they operate.

To determine the impact of the reform, the OECD compared companies located just above and below the income threshold. Those subject to the regulations were found to experience higher effective tax rates, while evidence of any effect on investment or employment was limited.

Unlike previous estimates that were based on models, the study was based on the behavior seen by companies after the application of the standards.