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The Global Minimum Tax and the taxation of MNE profit

Author

Listed:
  • Felix Hugger
  • Ana Cinta González Cabral
  • Massimo Bucci
  • Maria Gesualdo
  • Pierce O’Reilly

Abstract

The paper assesses the impact of the global minimum tax (GMT) on the taxation of multinational enterprises (MNEs), based on a comprehensive dataset capturing the global activities of large MNEs. It has four key findings. First, the GMT substantially reduces the incentives to shift profits. Second, the GMT is estimated to very substantially reduce low-taxed profit worldwide through lower profit shifting and top-up taxation. Third, the GMT is estimated to increase CIT revenues. Finally, the GMT is estimated to reduce tax rate differentials across jurisdictions with potential impacts on the allocation of investment and MNE activity.

Suggested Citation

  • Felix Hugger & Ana Cinta González Cabral & Massimo Bucci & Maria Gesualdo & Pierce O’Reilly, 2024. "The Global Minimum Tax and the taxation of MNE profit," OECD Taxation Working Papers 68, OECD Publishing.
    • Handle: RePEc:oec:ctpaaa:68-en
    DOI: 10.1787/9a815d6b-en
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    Cited by:

    1. Andreas Hauer & Hayato Kato, 2024. "A Global Minimum Tax for Large Firms Only: Implications for Tax Competition," Discussion Papers in Economics and Business 24-06, Osaka University, Graduate School of Economics.
    2. Hayato Kato & Andreas Haufler, 2024. "A Global Minimum Tax for Large Firms Only: Implications for Tax Competition," Rationality and Competition Discussion Paper Series 516, CRC TRR 190 Rationality and Competition.

    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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