Interview on the global 15% tax with Peter Varga

Today, the world is talking about the proposal of US President Biden for a global tax rate of 15%. Although this proposal is only being discussed at a political level, the EU Tax Observatory has already presented in its June 2021 report that such a minimum tax would generate €50 billion extra tax revenue per year for EU countries. As this figure is very abstract, €50 billion represents 59% of the current total EU corporate tax revenue.

So far, the whole topic is more of a political topic, so we don’t have more details on that. However, simplified in practice it could look like this. For example, if Ireland (probably the main recipient of these changes) taxes 1% of Google’s total profits, the Netherlands 0.5% and Bermuda 0%, the rest (up to 15%) should be taxed in the US (the so-called “home country”). At first glance, it seems quite simple and straightforward. In practice, however, the world is more complicated and we anticipate that it will take years (based on historical experience) for this, if ever in this vision, to become an effective section.

It seems that the Slovak “public budget” should be bypassed by such a tax revolution. This is because Ireland (the main tax haven in this context) does not agree to Slovakia taxing profits of large companies from sources in Slovakia (and neither do other EU countries). And as long as this does not change, or no such global company is established in Slovakia, it will probably not concern us very much.

More on this topic in an interview for Postoj with Peter Varga