Hi everyone,
Hope all is well. As we all know taxation plays a huge role in corporate valuation and this new agreement today might have significant implications. The Organisation for Economic Co-operation and Development (OECD) announced support from 136 countries on how to best tax multi-nationals. The deal included a 15% minimum rate for corporations and for the largest multinationals, there will be a tax on 25% of profits over a 10% margin. According to OECD, a minimum rate could ultimately raise government incomes by $150 billion a year and these new rules would reallocate $125 billion of profits to be taxed in nations where big corporations generate revenue but may have little physical presence.
Is this the magic elixir to tax Alphabet and Facebook internationally? The US is not part of this deal and for any deal of such sort to pass will require a two-thirds majority vote in the US Senate. Well, based on some of the comments made already by the Republicans, this agreement will not be viewed favorably by them and will not pass.
Only time will tell. Until next time………………………….
Joel
Recent Comments