The Guardian view on global corporate tax: a $500bn prize that states must seize | Editorial
Summary
A new report says governments could collect an extra $500 billion a year by changing the way multinational companies are taxed. Instead of taxing profits where companies report them (often in tax havens), countries want to tax profits where real business happens, such as where workers and customers are located. The United Nations is starting talks to create global rules on this.Key Facts
- Multinational profits are often reported in tax havens, where companies pay little tax.
- The report proposes “unitary taxation” to tax profits where real economic activity occurs.
- This approach aims to shift tax revenue from tax havens to countries where workers and customers are.
- The UN is holding talks to make a global tax framework, with goals to finish by late 2027.
- The US, under President Trump, left these talks last year and encouraged others to do the same.
- Rich countries, like Britain and EU members, would gain billions more in tax revenue.
- Developing countries could receive $156 billion more, a sum larger than their current IMF loans.
- The talks aim to modernize tax rules designed for old industrial companies to fit today’s global digital economy.
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