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Exploring Options Beyond Pillar 2
Exploring Options Beyond Pillar 2
While the OECD’s minimum tax provision holds promise for developing countries, it’s not a complete salve for the corporate tax problems that developing countries face, nor should it be treated as one.
Some countries are anticipating that their yields might not be particularly high.
For example, Colombia is home to only a few multinational groups that meet the OECD’s potential €750 million revenue threshold for pillar 2. Thus, it might not see a substantial increase in tax revenue, according to Natalia Quiñones of the Colombian Institute of Tax Law.
That means developing countries should be thinking about other measures as well. For example, anti-base-erosion measures like caps on the deductibility of some expenses to related parties are important, as are rules denying local deductions for base-eroding payments if the recipient entity isn’t subject to a minimum tax rate, according to the IMF.
Another solution would be to apply withholding taxes, an angle the U.N. Tax Committee is exploring via its proposed model treaty article 12B on automated digital services.
Read More : สล็อต
While the OECD’s minimum tax provision holds promise for developing countries, it’s not a complete salve for the corporate tax problems that developing countries face, nor should it be treated as one.
Some countries are anticipating that their yields might not be particularly high.
For example, Colombia is home to only a few multinational groups that meet the OECD’s potential €750 million revenue threshold for pillar 2. Thus, it might not see a substantial increase in tax revenue, according to Natalia Quiñones of the Colombian Institute of Tax Law.
That means developing countries should be thinking about other measures as well. For example, anti-base-erosion measures like caps on the deductibility of some expenses to related parties are important, as are rules denying local deductions for base-eroding payments if the recipient entity isn’t subject to a minimum tax rate, according to the IMF.
Another solution would be to apply withholding taxes, an angle the U.N. Tax Committee is exploring via its proposed model treaty article 12B on automated digital services.
Read More : สล็อต