The issue of corporate taxation has taken center stage in many policy-makers’ minds across the world, yet difficulties in agreeing on a solution seem to have resulted in an effective “paralysis.”
According to PwC and OECD data cited by The Economist, the global average corporate income tax as a share of profits is continuing to drop precipitously. From an average of over 19 percent in 2004, the figure had dropped to roughly 16.5 percent by 2012. As a percent of GDP, the average revenues from corporate income tax for the OECD rose to a high of just over 3.5 percent in 2006 before falling in the recession to approximately 2.25 percent. This figure did recover by 2012 to just below its 2004 level of about 2.8 percent.
In response, the 2012 G20 called on the OECD to find consensus as to how to close the loopholes in international tax standards that multinationals exploit to lower their bills, according to the news source. After two years, the OECD presented its plan to the 2014 G20 on Sept. 20 for approval, which it received.
The proposal attempts to curb a number of practices and is to be followed by a second part next year. Practices that would be banned or curbed include “transfer pricing,” by which multinationals shift profits to low-tax countries by charging fees between different subsidiaries they own, and “hybrid mismatching,” which allows companies to claim double deductions by classifying financial instruments as debt in one country and equity in another. Additionally, it would allow member countries to share information about multinationals’ assets, sales, profits, etc among other measures.
Unfortunately, the next stage is genuinely much harder, according to The Guardian. Agreeing to a measure at the G20 is one thing – expecting every OECD country to embed the measures into the more than 3,000 tax treaties of global trade is quite another. Clearly, many countries are dedicated to ending the “race to the bottom” that has characterized global corporate tax policy issues over the last several years, but the current measure should be considered with some skepticism.
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
