Global minimum tax is a tax policy proposal that would require large multinational corporations to pay a minimum tax rate on their profits, regardless of where they are located. Essentially, the idea is to ensure that multinational companies pay a minimum amount of tax in all countries in which they operate, thus preventing them from shifting profits to no tax or low-tax jurisdictions.
What is the key impact of global minimum tax?
1. Increased Tax Revenue: A global minimum tax would raise the effective tax rate of multinational companies that have been able to reduce their tax bills by shifting profits to low-tax jurisdictions.
What is the impact of global minimum tax on transfer pricing?
Multinational companies will have to re consider the current transfer pricing policies and models to factor the global minimum tax initiatives.
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