GLOBTAXGOV Blog: Are G7 Countries Doing Developing Countries a Favour When Levying Global Minimum Taxes?

By Frederik Heitmüller | 10 June 2021

Last Saturday, the G7 announced political support for the adoption of global minimum taxes levied on multinational enterprises’ (MNEs) headquarters. This announcement has not been received without controversy, especially concerning the potential impact of such minimum taxes on developing countries. While some see in them just as another measure favouring rich countries, others emphasize the “fiscal space” such taxes would afford to developing countries (see for example the discussions in a GLOBTAXGOV roundtable organized on 2 June).

This controversy and the fact that most design features of a global minimum tax have not yet been agreed on make it worthwhile to revisit whether the adoption of a “comprehensive” minimum tax such as recently proposed by the United States (i.e. without substance carve-outs and without worldwide blending) would be in favour of developing countries which mainly import capital and host few headquarters of MNEs.

Read the full blog here.