The Economic Analysis Council published this assessment on Tuesday, less than two weeks before the next meeting of G20 finance ministers.
Fixing a global minimum tax rate of 15% on the profits of multinationals would bring France nearly 6 billion euros per year, according to an assessment published Tuesday by the Economic Analysis Council (CAE).
This note from the CAE, the body responsible for advising the government, is published less than two weeks before the next meeting of G20 finance ministers, where an agreement is hoped for on a new taxation of multinationals. At the beginning of June, at the instigation of the United States, the G7 countries notably committed themselves to the objective of a minimum corporate tax rate of “at least 15%“.
According to the CAE, the principle of an effective minimum tax rate is a tool “very powerful” who “could call into question the very existence of tax havens, Used by companies to reduce their taxes. It would allow France to tax the foreign profits of French multinationals which would have been taxed abroad at a rate lower than the minimum rate, in order to compensate for this difference.
Relocation: 56 million euros in losses
In total, with a rate of 15%, this would bring in the short term 5.9 billion euros in tax revenue per year to France, mainly from French companies, estimates the CAE. By comparison, Germany would gain 8.3 billion euros, and the United States nearly 15 billion euros.
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For France, two-thirds of these gains would come from additional revenues earned on the subsidiaries of French multinationals in “tax heavens», Mainly Switzerland, the Netherlands and Luxembourg. The rest would come from the surplus revenue that would be collected in France, some companies having less interest in transferring their profits to tax havens. The loss of revenue linked to the relocation of companies would be only 56 million euros, adds the CAE.
In the long term, however, the surplus in tax revenue would be smaller, insofar as tax havens would have an interest in adjusting to the reform by raising their tax rates. The gain would then reach nearly 2 billion euros. These evaluations are, however, dependent on several parameters still under negotiation, such as the scope of taxed profits and the level of the minimum rate.
On the other hand, according to the calculations of the CAE, the other part of the reform under negotiation, which aims to define a new distribution of rights to be imposed between countries to take into account the rise of the digital giants, would yield only 900 million euros to France.