1, the so-called "century tax reform" of G7 is transnational in nature. In other words, G7 tries to set global rules of the game for G7 by taking the "century tax reform" as a successful case, which is the first of its kind. Once the G7 is successful, it will launch various "global policies" one after another to dominate the division of global interests, and then realize the dream of "seven countries sharing the world".
2. It is always said that G7 is essentially G 1. Because the other six countries are all American foes. G7 wins the privilege of formulating "global policies", which means that the United States wins the dominance of global interest distribution. Once the United States has won the dominance of global interest distribution, then the dollar can be decoupled from oil again after decoupling from gold, and the dollar's position as a world currency will be more stable, because the pain of the dollar is gone, and the United States can rest easy.
3. At present, the only legal institution with the right to deal with global issues is the United Nations. Once the G7 has the power to formulate "global policies", it is equivalent to abolishing the United Nations and the current international order. By then, the world will return to the era of colonial empire, and the United States will become the overlord of colonial empire. The world will return to a heyday similar to that of the British Empire, except that the colonial overlord is the United States!
In a word, the world should beware of G7 destroying the right path in the world by small reasons.
A few days ago, the Group of Seven, including the United States, Britain, France, Germany, Italy, Canada and Japan, reached an agreement to support setting the lowest corporate tax rate in the world at 15%.
The launch of this lowest tax rate agreement is intended to crack down on all kinds of tax evasion around the world, because there are many tax havens around the world, such as Cayman Islands, Virgin Islands, Bermuda, Panama, Luxembourg, and even Northern Europe's Ireland, which have no corporate income tax or very low corporate income tax, so they are very popular with major multinational enterprises.
For example, Apple makes a lot of profits every year, but a large part of the profits are trapped in countries with lower tax rates; For example, Microsoft's total profits in Ireland have exceeded 300 billion dollars, but because the registered address of Microsoft is Bermuda, Bermuda has no corporate income tax, which saves Microsoft a lot of taxes and fees.
Now that the G-7 has launched the lowest tax rate agreement, I believe it will be recognized by many countries. After all, many companies around the world have set up some offshore companies to achieve the purpose of tax avoidance, which has caused great losses to the countries where the companies are located.
Once the global minimum tax rate agreement can be fully promoted in the future, and countries abide by such an agreement, many enterprises, some tax havens and some intermediary companies will be affected.
Nowadays, many multinational companies will set up offshore companies in some small island countries. Through these offshore companies, they can keep the profits from overseas operations overseas instead of returning them to the United States, thus avoiding paying a large part of corporate income tax.
Once the global minimum corporate income tax rate is officially implemented in the future, this kind of tax avoidance behavior cannot be implemented, because under the minimum tax rate agreement, if the tax rate in a country is lower than the minimum tax rate, then it needs to pay the difference tax to the home country.
For example, the enterprise income tax rate in Ireland is 12.5%. If an enterprise detains a large amount of overseas profits in Ireland, in addition to paying the tax rate of 12.5%, it should pay the difference from the lowest tax rate of 15%, that is, 2.5% tax to the home country where the company is located.
If an enterprise sets up an offshore company in those small island countries, and there is no need to pay income tax locally, then the enterprise will pay the difference tax rate of 15% to the home country, which will have a great impact on many enterprises.
There are many tax havens now, and these tax havens are generally dominated by small countries. These small countries have no industries, and most of them rely on the financial industry and tourism to maintain their economies.
However, if the agreement on the lowest global corporate income tax rate comes into effect in the future, the offshore companies set up by enterprises in these countries will not be able to enjoy the lowest tax rate, and they will have to pay the minimum income tax of 15%. As a result, the advantages of these tax havens will no longer exist and their attraction to multinational companies will be greatly reduced.
Once the number of registered multinational companies is reduced, it will have a great impact on the local financial industry and tourism industry.
Offshore companies are very popular, so some intermediaries around offshore companies have emerged in the market. These intermediaries charge certain fees and financial expenses by handling offshore companies for multinational companies.
Once the global minimum tax rate is officially implemented, the enthusiasm of enterprises to set up offshore companies will be reduced, so some intermediary companies that conduct business around offshore companies will also be greatly affected.
However, once the global minimum tax rate is implemented, the biggest impact will basically be some European and American countries, because at present, it is mainly these European and American enterprises that really have a large number of profit sources overseas, which will not have much impact on China.
Because at present, most enterprises in our country have their business and profit sources in China, and the taxes they should pay have been paid for doing business in China; The profits brought by many enterprises in overseas markets are actually relatively small, and the real impact is only a few large enterprises.
First of all, the traditional tax havens are the hardest hit, that is, the Virgin Islands and Cayman Islands. We can see how many China enterprises are registered in these places. This international tax agreement is to crack down on these areas first, and it is basically impossible for them to play any tricks.
Then low-tax areas are damaged, such as Singapore, Switzerland, Austria and other places.
Some people think that in a place like Ireland, the original tax rate is only 12.5%, which is similar to the minimum tax rate of 15% agreed this time, and should have little impact. But this idea is actually wrong. Even in a country like Singapore, the original tax revenue is 17%, which is higher than the minimum requirement of 15%, but it will still be affected.
Why?
Because the minimum tax rate of 15% in this agreement is a hard tax rate. What do you mean? That is to say, some regions in many countries may have tax relief policies. For example, the tax rate of the film industry in Horgos was very low after preferential treatment. Therefore, the actual tax rate levied by many countries with low tax rates may be much lower than 15%. At present, the tax rate of 15% is required to remain above 15% after tax concessions. Therefore, countries with low tax rates will also be affected.
After this agreement is extended to the G20, there is a high probability that China will agree. As China is a country with high tax rate, this agreement is beneficial to us as a whole. As for those small countries with low tax rates, they have no right to speak internationally, so there is nothing they can do.
Generally speaking, this international tax agreement is that small countries suffer, big countries eat meat, and small countries only have the opportunity to bargain and have no right to resist at all.
Some people may ask, what if a small country refuses to implement the 15% tax? In fact, it's easy. For example, if you only have a tax rate of 10% in Cayman Islands, the poor 5% tax will be collected by the company's home country and put into the pocket of the company's home country.
Indeed, the G7 held a meeting this year, and they initially reached an agreement. First, they demanded that the global minimum tax rate should be set at 15% within G7, then it should be extended to G20, and then it should be extended to other countries around the world 100. However, the ideal is full and the reality is very skinny. For those countries with low tax rates, they are generally satisfied, but for those countries with high tax rates and developing countries, it may actually affect their own economic development to a certain extent, even for their own economies.
But in fact, if we are specific, it means that developed countries are satisfied, low-tax countries are satisfied, and American technology giants are satisfied, especially American technology giants, especially Internet giants. Holding a banner of global tax reduction and benefiting the society, G7 actually hides the self-interest of its own country.
However, as far as the future signing prospect is concerned, it is very likely that G7 can sign because their corporate income tax is relatively low, but G20 countries may not agree to sign. In many countries, the current tax rate is still above 15%. If they sign, domestic enterprises will move overseas faster. Lowering the income tax rate is great bad news for these countries and the development of Shanghai's own economy.
Why are American technology giants the biggest winners? Because they have been punished by retaliatory tariffs of the European Union before. These American technology giants have adopted various ingenious tax avoidance measures, resulting in their business income earned in Europe not being taxed in the local countries or paying very little tax. France, Germany and other European countries were very dissatisfied and issued high fines. However, if the G7 meeting can be signed, this retaliatory tariff may be cancelled, and the previous punishment can also be cancelled. Isn't it a great advantage to forget the past?
However, we know that the economic development levels of countries around the world are different. It cannot be extended to all countries in the world with the idea of developed countries in Europe and America. Some countries may have higher tax collection, but less subsidies for enterprises. Some countries may set different tax rates according to the industries they support, while others will set different tax rates according to different stages of development. However, European and American countries have entered a mature society, and they are unlikely to change, so it is definitely inappropriate to simply and rudely set a data.
Especially for high-tech industries and internet industries, if a unified tax rate is implemented, high-tech industries and internet industries in many countries may soon disappear. Because giants such as Facebook and Amazon from the United States have huge competitive advantages in technology and capital, under the advantage of uniform tax rate, they will soon crush all Internet companies in other countries and implement global monopoly.
So to a certain extent, this is a plunder of the world by developed countries in Europe and America. It seems to make the world fair, but it is actually looking for a way of competition that is most beneficial to you. Don't be fooled by them.
On June 5th, the finance ministers and central bank governors of G7 countries, including the United States, Britain, France, Germany, Italy, Canada and Japan, initially reached an agreement to set the global minimum corporate tax rate at 15%, and the second half of this week's summit may be formally signed.
Whose hair was pulled out by the "Century Tax Reform"? As we all know, there are many small and micro countries and regions in the world. They are limited by their land area and have almost no complete industrial categories. Most of their income depends on tourism and financial industry. In order to attract giant enterprises all over the world to register in their own countries, low corporate tax or even zero corporate tax is their magic weapon. For example, the most famous tax havens in the world include Bermuda, Antigua, the Caribbean, Panama, Luxembourg, the Virgin Islands and the Cayman Islands.
There are global giant enterprises registered in the above-mentioned areas. These enterprises do not operate in the place of registration, but only pay very low taxes to the place of registration, thus avoiding the trouble of paying higher corporate tax rates to the countries where they operate. For giant enterprises and registered places, it can be described as "win-win".
The G7 Plan sets the lowest corporate tax rate in the world at 15%, which will at least "damage" the interests of the following subjects:
First, many "tax havens" bear the brunt;
Take the offshore financial center in the Caribbean as an example. Because it is close to North America and the tax rate is much lower than that in the United States, many American giants set up their registered places here, such as Google, Microsoft, Apple and other big companies. These giants keep most of their profits overseas and only pay a very low corporate tax rate to their registered places.
It is said that the Caribbean offshore financial center can help American companies avoid tax by 2 trillion dollars every year. After the lowest corporate tax rate in the world is raised to 15%, the new attraction of "tax havens" to enterprises obviously does not exist, and the purpose of intercepting tax revenue by low tax rate naturally cannot be achieved.
For example, the lowest corporate tax rate in Macedonia is 10%, and the revenue of multinational enterprises registered here before is $200 billion, so they only need to pay $20 billion in local taxes instead of $30 billion (15%) in the country where they do business. However, when the lowest tax rate is raised to 15%, in addition to paying to Macedonia,
As a result, the giant enterprises previously registered in tax havens may move their registered places back to the mainland, which will become less and less attractive to the newly established giants, and the tax revenue of these tax havens will definitely be greatly affected.
Second, large-scale multinational enterprises should pay more enterprise income tax;
The requirement of the lowest tax rate 15% may not be aimed at all multinational companies, but only at those "the largest and most profitable multinational companies", such as Microsoft, Apple, Facebook, Amazon and other technology giants. Therefore, these giants will pay more corporate income tax, and the actual profits will naturally be less, belonging to the biggest damaged group.
However, according to the preliminary agreement, 15% may not be the "lowest", and it is very likely that a large multinational company with a profit margin of 10% will be taxed at the lowest rate of 20%.
If the final plan is really like the preliminary agreement, then the multinational companies with profit rate of 10% and the "largest and most profitable" multinational companies will undoubtedly pay more corporate income tax. Those enterprises with small scale and low profit rate may not be affected and still implement the original tax rate.
Third, the intermediary is affected;
There are intermediaries around the world that are responsible for helping multinational companies register in these "tax havens" and collect intermediary fees from them.
After the minimum tax rate is raised to 15%, the attraction of "tax havens" to multinational enterprises is getting lower and lower, and the business volume of intermediaries will also be greatly reduced.
Written at the end: Judging from the current performance of Chinese multinational companies overseas, this agreement has little impact on Chinese enterprises, because the income of Chinese enterprises overseas is still relatively low, and most of their business and revenue are at home, and they are also taxed at the domestic tax rate.
For Hong Kong, the advantage of low tax rate may be reduced, because the corporate income tax rate in Hong Kong is between 7.5%- 16.5%. But the low tax rate is part of it, and the business environment plays a decisive role in the attractiveness of multinational enterprises.
The G7 communique shows that this part of the agreement still has specific commitments, "We will provide appropriate coordination for all companies, apply new international tax rules and abolish all digital service taxes, and other related similar measures."
Regarding digital tax, Kyle Pomerleau believes that the threshold of digital tax levied by Britain, France and other countries is very high, and it is mainly aimed at large American technology companies. "In essence, digital tax is the tariff imposed by these countries on American technology companies doing business in their own countries."
He said that Biden's government is willing to cooperate with other countries in corporate tax reform, which increases the possibility of reaching an agreement, but there are still some problems to be solved. Countries need to reach an agreement on how to redistribute the profits of large-scale science and technology enterprises among countries, which means there must be winners and losers. In addition, when collecting digital taxes, the United States hopes to treat enterprises in the United States and EU countries equally, which may encounter resistance from some countries.
Gary Hufbauer said that President Biden suggested not to levy digital tax, but to require the world's largest multinational enterprises (such as global 100) to pay taxes on a global scale, that is, to pay taxes in areas where profits are generated, rather than in places where goods or services are produced. Both digital tax and Biden's proposal will greatly aggravate the complexity of the tax system and international tax disputes.
"If put into practice, the biggest beneficiaries will be accounting companies and tax lawyers. I don't think it is possible for countries to reach any agreement on this at least in recent years. "
Pulling a lot of people's hair, it can be said that pulling a hair will involve a lot of people being plucked.
The first plucker: multinational companies registered in many low-tax countries, but operating global business, many technology giants in the United States will be plucked first, and this part of hair is a lot, which can bring a lot of tax revenue to the United States in particular.
Second plucked: many small countries and regions with low tax policies, such as Luxembourg, Ireland, Cayman Islands, Virgin Islands, Bermuda, etc., can only be trampled on by them. G7 countries have big mouths and small mouths, and they have no right to speak. Even if they don't listen to their new policies and maintain their old ones, they have nothing to gain, and they have offended these "big bosses".
The third plucker: through relevant policies, the affected working people have a saying: wool is on sheep. The profits of these multinational companies have decreased, so one of the most direct ways to recover profits is to continue to squeeze the wages of workers, that is, the workers who work for multinational companies, reduce operating costs by reducing labor costs, and then fill the taxes and fees levied.
The fourth plucked person: enterprises and companies that have direct business dealings and indirect business dealings with these multinational companies are actually the same as the above, especially affected by the global epidemic. Now business in all industries is not good, and they will try their best to reduce costs in all aspects. These enterprises and companies will also be implicated, together with the workers who work for these companies, as well as all companies associated with these companies and more workers.
The fifth plucked person: our end consumers, for example, these multinational companies in the United States, when their corporate profits are affected, they are likely to directly raise the price of their products to maintain their original profits, so it is our end consumers who are ultimately affected.
Therefore, if we study it very carefully, it seems that the vested interest is G7, but it is really reflected in all walks of life and everyone related to it, and recycled to the national level. Maybe they will not benefit in the end, which is the real meaning of taking the lead and moving the whole body!
On the surface, this agreement is only to prevent some countries from attracting multinational enterprises with low tax rates, and also to prevent multinational enterprises from evading taxes. In fact, the deep-seated problem is to solve the financial crisis of some big countries and pave the way for them to dominate the global economy.
First of all, we can see that this agreement is to prevent some countries from attracting multinational companies to register and invest with low tax rates, which will lead multinational companies in other countries to take advantage of loopholes to avoid taxes legally, making the revenue unsustainable. From this point of view, this agreement is naturally good.
However, we must also see that the reason why this agreement appeared in this sensitive period after the epidemic was because the economies of welfare countries such as the United States and Europe were hit hard by the epidemic, and the fiscal revenue was unsustainable, so it was necessary to make up the deficit through taxes. And those multinational companies that legally avoid taxes by registering companies in low-tax countries are the targets they want to use. I believe that this agreement is only the first step, and then, they will have more perfect methods to deal with these enterprises that protect their pockets in various ways.
In addition, such an agreement, dominated by countries such as the United States and Europe, is bound to cause a lot of countries suffering from tax evasion, and more and more countries will choose to join the agreement. This will undoubtedly aggravate the dominant position of countries such as the United States and Europe in the global economy, and their harvest of the global economy will also intensify!