The agreement on the taxation of multinationals reached in Venice has raised logical hopes. It represents a turning point in the race to the bottom in the payment of taxes of the big companies of the last 40 years. The system agreed upon in the G-20 and the OECD, pending final approval, has nevertheless raised serious objections from authorities such as the Nobel laureate, Joseph Stiglitz, the economist Thomas Piketty, developing countries and organizations that they fight for tax justice like Oxfam.
Stiglitz argues that a minimum 15% tax on multinationals is an important step, but he moves away from triumphalism: “The trick is in the details.” Professor Piketty has pointed out that this is “a real license to defraud the most powerful actors.” It specifies that for small companies and the popular classes it is impossible to create a subsidiary to relocate their profits in a tax haven.
The reality is that business concentration has increased the power of corporations to evade taxes. The report Justice fiscale. État des lieux of several entities (Global Alliance for Tax Justice and Tax Justice Network, among others) reveals that international tax abuses cost States 427,000 million dollars (359,000 million euros) each year, preventing them from financing services. The biggest losses, some 206,000 million euros, are transfers from multinationals to tax havens.
The G20 and OECD compromise contains two parts. Pillar I aims to distribute the taxes paid by multinationals among the countries in which they operate. But the rule only applies to corporations with sales of more than 20,000 million dollars (16,840 million euros), to profits greater than 10% and, worst of all, it only applies to a part of them (between 20% and the 30th%). It would only affect 78 companies and some 73,000 million euros would be redistributed. Banks have been saved from this rule. Amazon would be exempt for obtaining profits of less than 10%, which is why the rule is being applied to its subsidiaries that obtain them. According to Oxfam, the multinationals affected will only distribute between 1% and 1.5% of their profits in certain markets where they operate.
Pillar 2 establishes a minimum rate of 15% on the benefits obtained to companies whose sales exceed 750 million dollars. After applying the foreseen exemptions, the tax rate that they would pay in certain countries would be 3.2%. The 38 countries of the African Tax Administration Forum (ATAF), which only receive 3% of revenue, have called for the minimum rate to be at least 20%. France had requested 25%.
For Oxfam, the agreement “may increase the already grotesque levels of inequality in the international tax system.” Susana Ruiz, a researcher at the organization, specifies that “such a deficient agreement would be very unfair, because it has required eight years of negotiations and will remain for a long time.” Global tax justice is a long way off.