Global Corporate Tax

July 8, 2021 Dr. Ziva Rozen-Bakher

Published 8 July 2021. Latest Update 04 April 2022

Global Risks by Dr. Ziva Rozen-Bakher

Global Risks aims to Stimulate Thinking ‘Out of the Box’ about Ongoing Global Problems that have no clear Solutions.

Do we need a global corporate tax for global prosperity?

How it can be implemented against sovereign countries that oppose global corporate tax?

A low tax regime has become for years a location factor that encourages Foreign Direct Investment (FDI). For some countries without natural resources, it serves as their national competitive advantage compared to other countries. However, from the country perspective, low income from corporate tax, it's like a person with a low salary that has money only for basic needs. Thus, a country with a low income from corporate tax has a problem allocating a budget for the development of public infrastructure or public services. Paradoxically, many firms and individuals are rich in such a country, but the country is relatively poor, especially in relation to public needs.

If we assume that global corporate tax will benefit global prosperity, especially in relation to public needs at the country level, still, is it possible to "force" countries to implement it? If not, is the global corporate tax will be effective when many countries will increase the corporate tax according to the rate of the global corporate tax, while in other countries the tax rate will remain low? Is it will lead to the creation of high tax regimes versus low tax regimes that may backfire the global corporate tax? Pharaps, the answer lays in the implementation of global corporate tax.

Update, 04 April 2022. Poland, Sweden, Estonia, Malta block EU minimum corporate tax deal | Reuters

Discussion on this Topic in the Research Literature

Global distribution of revenue loss from corporate tax avoidance: re‐estimation and country results - Cobham - 2018 - Journal of International Development - Wiley Online Library

A critique of the Laffer theorem’s macro-narrative consequences for corporate tax avoidance from a Global Wealth Chain perspective: Globalizations: Vol 18, No 2 (tandfonline.com)

Statutory corporate tax change and the stock market returns: the global experience: Applied Economics Letters: Vol 28, No 6 (tandfonline.com)

Corporate tax avoidance practices of multinationals and country responses to improve quality of compliance | Western Sydney University ResearchDirect

Latest News about this Topic

Global tax deal seeks to end havens, criticized for 'no teeth' | Reuters

Ireland agrees to global tax deal, sacrificing prized low rate | Reuters

Global tax deal inches closer as holdout Ireland agrees to sign up (msn.com)

Ireland frets about losing its ‘sacrosanct’ low-tax regime | Financial Times (ft.com)

Dutch government scrambles to keep Shell in Netherlands - News Azi