Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: October 7, 2014
The Firm
201-896-4100 info@sh-law.comAccording to PwC and OECD data cited by The Economist, the global average corporate income tax as a share of profits is continuing to drop precipitously. From an average of over 19 percent in 2004, the figure had dropped to roughly 16.5 percent by 2012. As a percent of GDP, the average revenues from corporate income tax for the OECD rose to a high of just over 3.5 percent in 2006 before falling in the recession to approximately 2.25 percent. This figure did recover by 2012 to just below its 2004 level of about 2.8 percent.
In response, the 2012 G20 called on the OECD to find consensus as to how to close the loopholes in international tax standards that multinationals exploit to lower their bills, according to the news source. After two years, the OECD presented its plan to the 2014 G20 on Sept. 20 for approval, which it received.
The proposal attempts to curb a number of practices and is to be followed by a second part next year. Practices that would be banned or curbed include “transfer pricing,” by which multinationals shift profits to low-tax countries by charging fees between different subsidiaries they own, and “hybrid mismatching,” which allows companies to claim double deductions by classifying financial instruments as debt in one country and equity in another. Additionally, it would allow member countries to share information about multinationals’ assets, sales, profits, etc among other measures.
Unfortunately, the next stage is genuinely much harder, according to The Guardian. Agreeing to a measure at the G20 is one thing – expecting every OECD country to embed the measures into the more than 3,000 tax treaties of global trade is quite another. Clearly, many countries are dedicated to ending the “race to the bottom” that has characterized global corporate tax policy issues over the last several years, but the current measure should be considered with some skepticism.
As an international tax attorney check out some our previous posts regarding multinational taxes:
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!