The European Commission on June 1 announced the launch of the European Tax Observatory, an independent, EU-financed research laboratory to study and advise EU policymakers on initiatives to tackle tax avoidance. The Tax Observatory’s first report analyzes how much tax revenue the EU could collect by imposing a minimum tax on multinational companies.

Take the scenario of a 25% rate

In this case, “the European Union would increase its current corporate tax revenues by about €170 billion in 2021—from the €340 billion projected to be collected in 2021 under current law to about €510 billion”, according to EU Tax Observatory.

And among member states, Luxembourg would be the big winner of such a reform. Thus, the Grand Duchy would collect €7.9 billion in additional corporate tax. This would correspond to an increase of 282.3%, far ahead of the second beneficiar", Ireland (+ 168%).

But it’s a sham gain, analyses the report. Because “this result relies on the assumption that countries like Cyprus, Ireland or Luxembourg would keep the headquarters they have attracted so far in part by offering low corporate tax rates. In reality, with an international agreement on a minimum tax, headquarters might move to currently high-tax countries, which means that tax havens would likely benefit less”.

Joe Biden reviewed his copy

Launched last April by the United States, the idea of ​​a global tax made its way to the G20. But if initially the American president Joe Biden had mentioned a rate of 21%, he has since revised his ambitions downwards, now defending a rate of 15%.

Luxembourg not opposed to a global tax

In an interview with the Bloomberg agency in April, the Luxembourg Minister of Finance, Pierre Gramegna, declared himself in favor of a global tax while defending the specificity of “certain European countries, for example small open economies, such as the Benelux countries, the Scandinavian countries or the Ireland”. On RTL, he added that he did not fear the effects of such an international measure for the interests of Luxembourg. He believes that it is now more linked to the stability of the country, to its "triple A" and to its skills.

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Publié le 03 juin 2021