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Collecting the Tax Deficit of Multinational Companies: Simulations for the EU

Author

Listed:
  • Mona Barake

    (EU Tax Observatory)

  • Paul-Emmanuel Chouc

    (EU Tax Observatory)

  • Theresa Neef

    (EU Tax Observatory)

  • Gabriel Zucman

    (EU Tax Observatory)

Abstract

This report estimates the amount of tax revenue that the EU could raise by imposing a minimum tax on the profits of multinational companies. The study considers several scenarios for the imposition of such a tax — ranging from an international tax agreement to unilateral measures — and a range of rates. An international agreement on a minimum rate of 25% would allow the European Union to increase its tax revenues by 170 billion in 2021, an increase of 50% of the corporate tax revenue collected today. With a minimum rate of 15%, the additional tax revenue would only amount to about 50 billion euros. An EU country that unilaterally chose to subject its multinationals to a minimum rate of 25% and taxed part of the tax deficit of non-resident companies accessing its market would increase its corporate tax revenues by around 70%.

Suggested Citation

Handle: RePEc:dbp:report:001
as

Download full text from publisher

File URL: https://www.taxobservatory.eu//www-site/uploads/2021/06/TaxObservatory_Report_Tax_Deficit_July2021_Revised.pdf
File Function: Full report
Download Restriction: no
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More about this item

Keywords

minimum corporate tax; multinational companies; effective tax rate; tax avoidance; corporate tax revenue; tax deficit; EU tax policy;
All these keywords.

JEL classification:

  • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
  • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
  • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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