US AND OTHER COUNTRIES APPROACHES TO A GLOBAL MINIMUM TAX RATE

Abstract

The idea of a global minimum tax rate, pointing at the tax competition between countries, has been discussed a lot during the talks led by the Organization for Economic Cooperation and Development, European Commission, G 20, G 7. The paper focuses mainly on the international tax agenda, comparisons of corporate income tax rates, the approaches to a global minimum tax rate, the United States proposal and how tax policy could be adapted to meet challenges of minimizing global taxation of capital. Despite some common trends, there have been serious differences across countries regarding corporate income tax rates – nominal, average and effective which shows the percentage of income from a marginal investment that is to be paid in taxes. OECD’s database shows that corporate income tax rates vary greatly across countries, and the last year’s trend showed a number of countries announcing tax increase, which were both on temporary basis and permanent one. As to the United States proposal authors, establishing a global minimum tax would make it possible for the country to be competitive in the tax field even after proposed tax increase. The United States proposal before G 7 summit was supported by its members. At the same time negotiations on the new tax challenges from digitalisation with participation of different jurisdictions are going on.