The German parliament on Friday approved the implementation of a global minimum corporate tax, as part of an international deal to ensure large companies pay a minimum tax rate of 15%.
Multinational firms will have to pay a minimum of 15% tax on all of the profits they make worldwide, regardless of where the profits are generated.
Global tax is complicated. A reprisal tariff regime would be way way way more complicated. The US doesn’t want to be in a position where it’s levying 50% tariffs on Guinness because Ireland’s corporate tax rate is 12.5%. How do you know that tariff is fair and would the WTO even recognize uneven tax rates as a sanctionable offense?
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Global tax is complicated. A reprisal tariff regime would be way way way more complicated. The US doesn’t want to be in a position where it’s levying 50% tariffs on Guinness because Ireland’s corporate tax rate is 12.5%. How do you know that tariff is fair and would the WTO even recognize uneven tax rates as a sanctionable offense?
This is a carrot vs stick approach.
Hmmm makes me question the benefit of the WTO.