Ahead of negotiations tomorrow, Tax Justice Aotearoa is concerned about the international tax rules as 140 countries, led by the OECD and G20, edge closer to a new global tax deal, Tax Justice Aotearoa spokesperson Louise Delany says:
“It is disappointing that the 100-year old international tax rules still dictate how governments tax global corporations. These antiquated rules are no longer fit for purpose in a digital age. While the current OECD/G20-led government negotiations are an attempt to update the rules, they will amount to a huge missed opportunity to change things for the better unless more ambitious solutions are agreed.”
Tax Justice Aotearoa says that there are two key areas under negotiation: what business activities governments can tax global corporations for, and how much can be taxed, the latter essentially setting a global minimum tax rate for corporates.
"For the first area, governments must agree to a much broader approach than what is proposed, one that accounts for global corporates’ sales, labour and assets, so that the benefits go beyond a small handful of already wealthy countries," says Delany.
"We are also concerned that for the second area, the proposed minimum rate for global corporate taxation of 15% is nowhere near high enough. If agreed to this rate will do little to ensure that the poorest countries on earth get their fair share of what corporates owe them. We need a rate of at least 25%, and the revenues must be fairly shared across all countries, not only accruing where global corporates are headquartered", added Delany.
“Aotearoa New Zealand must take a strong stand alongside developing countries, by encouraging more ambition in these negotiations", said Delany.
“We will watch the outcome of the upcoming meeting closely, and will continue to promote tax justice within Aotearoa New Zealand and internationally.”
For further comment, please contact Louise Delany on 04-238-9963 or [email protected]
This Friday 8 October, GMT, the OECD/G20 Inclusive Framework of 140 countries come together to finalise proposals to alter the international tax rules. The final decision about these rules will be made in late October at the G20 meeting.
For greater detail on international tax rules, see Tax Justice Aotearoa’s International Tax Policy Brief.