The international tax reform has been discussed for many years. However, we are now entering the year of its suspected implementation. So, what is the international tax reform, what will it mean for businesses, and what is still being debated on it?
globalEDGE Blog - By Tag: oecd
Most of us have just finished filing our tax returns, and we likely hope to avoid the thought of taxes until next year's tax season. However, some major tax proposals are being discussed in the United States Congress that could change the international business climate drastically shortly.
We have already discussed some of the potential negative effects of the United Kingdom's withdrawal from the European Union, specifically on employment throughout the entire EU. The possible adverse consequences were highlighted again by the U.S. Federal Reserve chairwoman Janet Yellen and the Organization for Economic Co-operation and Development (OECD).
On Monday, October 5, the OECD published a new package of international corporate tax standards that is expected to be approved by the G-20 nations. One of the main goals of the new standards is to limit “profit shifting”, which occurs when companies develop legal structures to report profits in the lowest tax jurisdictions available. If the new standards are enacted by the G-20, it is estimated that governments around the world will recover between $100 and $240 billion in lost revenue per year.
At a recent G20 finance ministers’ meeting, the main topic of conversation was economic growth and policies to implement. The OECD was in attendance, and expressed the need for countries to focus on policies that won’t just establish economic growth, but that will foster global recovery. The desire for economic growth needs to be coupled with a focus on combating growing inequality around the world.