All articles tagged with #tax havens
The OECD has finalized a global tax deal that exempts U.S.-based multinational corporations from paying a 15% minimum tax on overseas profits, a move that has been praised by U.S. officials as protecting American sovereignty but criticized by tax transparency groups for undermining global progress on corporate taxation.
Nearly 150 countries agreed on a global tax plan to curb profit shifting by large multinationals, but the US is exempt, sparking criticism from tax transparency groups. The deal, finalized by the OECD, excludes US-based multinationals from the 15% minimum tax, which aims to prevent profit shifting to low-tax havens like Bermuda and the Cayman Islands. The US's exemption is seen as a move to preserve sovereignty and protect American companies, but critics argue it undermines efforts to combat tax avoidance and a race to the bottom in corporate taxation.
Microsoft plans to appeal a decision by the IRS that it owes at least $28.9 billion in back taxes related to its use of tax havens from 2004 to 2013. The dispute stems from a 2012 audit into transfer pricing, where Microsoft had been shifting profits to jurisdictions with lower corporate tax rates. The company has since changed its practices, and the issues raised by the IRS are not relevant to its current income recording. The proposed tax bill does not include taxes paid under the Tax Cuts and Jobs Act of 2017, which could reduce the amount by up to $10 billion. Microsoft shares were unaffected by the news.
Countries worldwide could lose an estimated $4.7 trillion in revenue over the next decade due to legal tax avoidance, illegal tax evasion, and creative accounting, according to the Tax Justice Network. The majority of the revenue loss is attributed to multinational corporations engaging in profit-shifting to low-tax jurisdictions, while the remaining portion is due to wealthy individuals benefiting from financial secrecy. The report highlights that both high-income and low-income countries experience revenue losses, but the impact is more severe for lower income countries. The Tax Justice Network supports moving global tax rulemaking authority from the OECD to the United Nations to address the issue of tax abuse.