International taxation: Biden opens up the way to reform
European Trade Union Institute, Brussels
ETUI - Brussels
2021
8 p.
taxation ; tax reform ; tax competition ; corporation tax
ETUI Policy Brief. European Economic, Employment and Social Policy
2021.10
Public finance and taxation
English
Bibliogr.
2031-8782
"Policy recommendations
• Progress is being made on combating corporation tax avoidance at international level. After a pause pending the results of the 2020 presidential election in the USA, discussions have resumed in an ‘inclusive framework' within the OECD. The recent decisions by the Finance Ministers of the G7 and by the ‘Inclusive framework at the OECD' confirm the political momentum to combat tax avoidance.
• There are two conflicting models: continuing to rely to the utmost on a model that regards the various entities of a multinational group as separate entities, with their tax base set by transfer pricing rules and based on physical presence, or moving over to unitary taxation, with the tax base allocated within the group – and among countries – on the basis of tangible factors, such as jobs or sales. The preferred option is the second one, and the proposals under discussion are a first step in this direction.
• The introduction of a minimum level of taxation is certainly a step forward. However, care must be taken to ensure that the level and scope are right in order to put an end to tax competition, which is detrimental in both economic and budgetary terms. "
Digital
The ETUI is co-funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the ETUI.