136 countries, including Poland, have agreed to changes to the international tax system. As the Polish Ministry of Finance explained on Friday, this will be the basis for the creation of legal regulations regarding taxation of digital giants and the next step in the fight against tax havens. The agreement on Friday stipulates that multinational companies will be subject to a minimum tax rate of 15 percent from 2023.
“Breach” – as defined in the OECD communication – the agreement covers 136 countries and jurisdictions, which together account for 90 percent. global gross domestic product. “Today we have taken another important step towards greater tax fairness,” German Finance Minister Olaf Scholz said in a statement quoted by Reuters.
The head of the ministry, Tadeusz Kosinski, said in a statement on Friday issued by the Ministry of Finance, that the negotiations at the OECD Forum were difficult, but we are still working and we jointly want to create a new tax reality in the world.
As Deputy Finance Minister Jan Sarnovsky assessed, “Participation in today’s settlement is an important step toward combating unfair tax competition.” – We have campaigned against tax havens since 2016. The Deputy Minister added that today’s political declaration will be translated into the language of actual regulations in the context of work in the field of the European Union implemented in the first half of 2022.
A statement by the Ministry of Finance stated that the statement came as a result of ongoing negotiations since July of this year. At that time, 130 countries, including Poland, as part of the work at the Organization for Economic Co-operation and Development (OECD) Forum, issued the first joint declaration of their willingness to work on international tax reform and international tax adaptation. Rules for the challenges of the digital economy.
These principles will rest on two pillars. The first column covers taxes for about 100 of the largest companies that, taking advantage of the progress of globalization and digitization, sell goods and provide services around the world. These are not only companies that provide us with digital content, but also the largest companies that sell services and goods online as well as traditionally. On the other hand, the second pillar provides for the introduction of a global tax with a minimum 15%. Effective rate – explained Deputy Minister Sarnowski.
“An important step towards combating unfair tax competition”
The deputy minister estimated that participating in the Friday settlement is an “important step towards combating unfair tax competition.”
– The compromise reached will not affect the attractiveness of Poland as a place for investment. Today’s political declaration will be translated into the language of actual regulations in the context of work in the field of the European Union implemented in the first half of 2022 – added Sarnovsky.
The Ministry of Finance assessed that the most important aspect of Poland in the international arena of the Organization for Economic Cooperation and Development is “to maintain competitiveness by excluding companies that carry out real economic activity from taxation with the minimum global taxation, the so-called material-based withholding”.
– At the beginning of the negotiations, we made it clear that we want to attract investors to Poland who will create jobs in our country. And, in fact, we were able to win a protection mechanism, thanks to which the taxes imposed on foreign companies investing in Poland will not be increased, Deputy Minister Sarnovsky emphasized.
Statement in the July edition of this year. It included a substance-based cut-off motion in the form of at least 7.5 percent exclusion. During the transition period of 5 years and after this period at least 5%. Asset values and wages. The proposal to introduce a transition period was Poland’s idea. As a result of more intense talks and negotiations, it was possible to increase the asset value ratio to 8%. And wages of up to 10%, in addition to increasing the transition period to 10 years with the reduction mechanism.
– From the beginning we assumed that such a tax should reach the so-called tax havens, that is, countries that apply unfair tax competition. Poland is not such a country. Hence the global tax should not lead to an increase in taxes on foreign companies that invest in Poland and conduct real economic activity here, we said it loud and clear. It was a condition for us to start further work on the global tax project – confirmed Finance Minister Tadeusz Kosinski.
tax evasion losses
The Ministry of Finance has stated that according to OECD research, global losses related to corporate income tax avoidance range between 4 percent. It amounts to 10 percent of global revenue from this tax, i.e. between $100 and $240 billion a year. He added that according to the “Loss of Nations Profits” report published last January, up to 40 percent. The profits of multinational corporations – $700 billion – go to tax havens every year.
Profits are transferred by large corporations, with the help of tax havens located in the European Union, to the detriment of other countries, which consequently lose tax revenue. Countries that do not apply unfair tax competition, including Germany, France, Italy, Hungary or Poland, Deputy Minister Saarnovsky said.
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