Will there be a minimum rate for corporation tax across advanced countries?

The payment (or avoidance) of corporate taxes is one of the most pressing issues in global economics at the moment.

With fiscal deficits and national debts soaring in the aftermath of the pandemic, governments are scrambling to engineer increased tax revenues to help cover the cost of their fiscal support programmes.

The United States under Janet Yellen has announced plans to establish a global minimum corporation tax rate and France and Germany have already fallen in behind the initial proposals.

Pressure may be mounting on tax havens and countries with ultra-low corporation tax rates such as Ireland to move towards a minimum effective rate of corporation tax (paid on profits) of perhaps twenty per cent.

Ireland's current corporate tax rate of 12.5% is one of the lowest, if not the lowest in the developed world and it has attracted a lot of inward investment, particularly from the tech sector.

No one should assume that multi-lateral reform of corporation taxes will be straightforward especially as many countries have relied heavily on cutting these taxes as a way of driving inflows of foreign direct investment.

The Global Corporate Tax Rates Table can be found here

Read: Financial Times: Global corporate tax deal edges closer after US backs minimum rate

More here from the Irish Times: Ireland’s low corporate tax regime will be undermined if Biden proposals pass

The IMF has called for higher wealth taxes to help address increasing inequality caused by the crisis

Here are some relevant tweets on the issue: