Taxation of Multinationals: Design and Quantification

Sébastien Laffitte, Julien Martin, Mathieu Parenti (), Baptiste Souillard and Farid Toubal
Additional contact information
Baptiste Souillard: ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles

Working Papers from HAL

Abstract: Minimum corporate taxation is the second Pillar of the reforms of international corporate taxation. It is a simple and powerful tool that could curb profit shifting towards low or no tax jurisdictions. Its implementation would allow France to tax the profits that French headquarters have shifted to tax havens, but also to reduce the erosion of its tax base. We estimate the French corporate income tax (CIT) revenues would increase by almost 6 billion euros in the short run after the implementation of an effective minimum tax rate of 15% and by 8 billion euros at a rate of 21%. CIT gains may vary substantially depending on the scope of the tax base, the possibility of headquarters' inversion, and whether it includes domestic corporations or not. CIT gains are relatively higher in France than in Germany or the United States. The expected gains are substantially larger than those to be expected from the implementation of the first Pillar of the reform in its version proposed by the US in April 2021, which opens up rights to tax the 100 largest corporations in the world according to their sales' destination. According to our estimates, Pillar One would bring in about 900 million euros for France.

Keywords: Tax rate; multinational corporation; reform (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-acc, nep-cwa, nep-int and nep-pbe
Note: View the original document on HAL open archive server: https://hal.science/hal-03361513v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in [Research Report] Université du Québec à Montréal;Canada. 2021, pp.13

Downloads: (external link)
https://hal.science/hal-03361513v1/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-03361513

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().