Globalisation No company
is an island
Ahead of its implementation in 2024, the arrival of the OECD’s global taxation rules, propelled by international collaboration, strives to end tax avoidance. But is the fairer-for-all regulation simply too fl awed to forge a new fi nancial era – especially for poorer countries reliant on the good will of foreign multinationals? Natasha Spencer-Jolliffe investigates, along the way talking to Daniel Bunn, president and CEO of the Tax Foundation, and Dr Pie Habimana, lecturer at the Faculty of Law at the University of Rwanda.
F
ew
laws have
the potential to transform the entire planet – but the
appropriately named ‘GloBE’
might just manage it. An acronym for Global Anti- Base Erosion, the series of rules expects countries to slap a ‘top-up’ tax on multinationals that have set up subsidiaries in countries where they do not have effective tax rates of less than 15%. Expected to come into force in 2024, this brainchild of the Organisation for Economic Cooperation and Development (OECD) has already been embraced by more than 135 countries and jurisdictions. Yet if GloBE is intended to stop companies from avoiding tax, abusing the generosity of host nations and
Chief Executive Offi cer /
www.ns-businesshub.com
creating a level
playing field for global investment, how robust is the specific framework to meet these aims – and what might such globalised rule-making suggest for the future of international taxation?
A global tax
GloBE falls under Pillar Two of the OECD’s Inclusive Framework (IF) on Base Erosion Profit Shifting (BEPS), an aspirational programme, dubbed the BEPS Actions Project, designed to help address tax avoidance, create consistency across international tax rules – and produce a more transparent tax landscape worldwide. These aims make sense. As the OECD notes, after all, so-called BEPS practices may cost
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