Countries that have implemented a global minimum tax on multinational companies have seen an increase in corporate tax revenues without a corresponding loss of jobs or investment, according to the Organisation for Economic Co-operation and Development (OECD). The global minimum tax was designed to curb a decades-long race to the bottom in corporate taxation by allowing countries to levy top-up taxes when profits are taxed below 15% elsewhere.

Impact of the Tax

The OECD estimated that the tax increased government revenue by €79 billion to €109 billion ($90 billion to $124 billion) in its first year, equivalent to 2.4% to 3.4% of global corporate income tax receipts. The study examined how companies responded after the introduction in 2024 of the global minimum tax, a cornerstone of international efforts to overhaul corporate taxation and deter large multinational groups from shifting profits to low-tax jurisdictions.

The tax aims to ensure companies face an effective tax rate of at least 15% wherever they operate. To identify the impact of the reform, the OECD compared firms just above and below the revenue threshold. It found that companies covered by the rules experienced higher effective tax rates, while there was limited evidence of any effect on investment or employment.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.