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The Global Minimum Tax and the taxation of MNE profit

Author

Listed:
  • Felix Hugger
  • Ana Cinta González Cabral
  • Massimo Bucci
  • Maria Gesualdo
  • Pierce O’Reilly

Abstract

The paper assesses the impact of the global minimum tax (GMT) on the taxation of multinational enterprises (MNEs), based on a comprehensive dataset capturing the global activities of large MNEs. It has four key findings. First, the GMT substantially reduces the incentives to shift profits. Second, the GMT is estimated to very substantially reduce low-taxed profit worldwide through lower profit shifting and top-up taxation. Third, the GMT is estimated to increase CIT revenues. Finally, the GMT is estimated to reduce tax rate differentials across jurisdictions with potential impacts on the allocation of investment and MNE activity.

Suggested Citation

  • Felix Hugger & Ana Cinta González Cabral & Massimo Bucci & Maria Gesualdo & Pierce O’Reilly, 2024. "The Global Minimum Tax and the taxation of MNE profit," OECD Taxation Working Papers 68, OECD Publishing.
    • Handle: RePEc:oec:ctpaaa:68-en
    DOI: 10.1787/9a815d6b-en
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    Citations

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    Cited by:

    1. Andreas Hauer & Hayato Kato, 2024. "A Global Minimum Tax for Large Firms Only: Implications for Tax Competition," Discussion Papers in Economics and Business 24-06, Osaka University, Graduate School of Economics.
    2. BRUN Lidia & PYCROFT Jonathan & SPEITMANN Raffael & STASIO Andrzej Leszek & STOEHLKER Daniel, 2025. "The impact of the global minimum tax on corporate tax revenues: evidence for EU Member States," JRC Research Reports JRC141119, Joint Research Centre.
    3. Brun Lidia & Stoehlker Daniel & Pycroft Jonathan & Van't Riet Maarten, 2025. "A – Potentially Positive – Welfare Assessment of the Global Minimum Tax," JRC Working Papers on Taxation & Structural Reforms 2025-04, Joint Research Centre.
    4. Chen, Xuyang & Sun, Rui, 2025. "The Global Minimum Tax, Investment Incentives and Asymmetric Tax Competition," MPRA Paper 126538, University Library of Munich, Germany.
    5. Johannes Kochems, 2025. "Local Tax Havens," ECONtribute Discussion Papers Series 379, University of Bonn and University of Cologne, Germany.

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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