Signs of progress on the global minimum tax
The Biden administration has proposed an overall minimum tax rate of 21% for multinational corporations, but other countries need to agree for the system to work. On Monday, Hans Vijlbrief, the Netherlands’ deputy finance minister, told Bloomberg he was optimistic about a deal being possible, potentially marking an important turning point in the fight against corporate tax evasion.
“When the Americans launch such a proposal and get the support of big countries like Germany and France, it would be surprising if a deal was not reached,” Vijlbrief said. “Tax competition is becoming a thing of the past.”
The Deputy Minister’s comments are particularly noteworthy given the role the Netherlands plays in the global tax avoidance system. According to the Tax Justice Network, the Netherlands is the fourth largest tax haven in the world, behind only the British Virgin Islands, Cayman Islands and Bermuda, and features prominently in the tax regimes deployed by some of the largest multinationals .
Vijlbrief said a deal could be reached by July, although many details need to be worked out. However, however long it takes, the interest in promoting tax evasion seems to diminish. “If you ask me, it’s not the business climate you want to pursue,” Vijlbrief said. “This harms the fiscal climate and the political morality of a country. If you want people to pay their taxes, big business has to do that too. “