Brunner: “Global minimum tax ensures tax fairness and strengthens Austria as a location”
draft law for a minimum tax of 15% is being assessed; Global minimum tax creates fair economic conditions
Finance Minister Magnus Brunner presents an important success in the effort to achieve more tax fairness for international corporations: The law, aimed at ensuring a worldwide minimum tax rate of 15% for corporate groups with revenues exceeding 750 million euros, is currently under evaluation. This measure is the result of intensive negotiations between 138 countries within the OECD/G20 Inclusive Framework to agree on a fair distribution of taxation rights and an effective minimum taxation. Based on this, an EU directive was adopted. The national implementation of the global minimum taxation is now carried out through the Minimum Taxation Act, which is due to enter into force at the beginning of 2024.
Finance Minister Magnus Brunner: “The global minimum tax ensures more justice. We are thus preventing unfair tax dumping in the future and, in combination with the reduction in corporate tax from 25% to 23%, we are making Austria even more attractive in international competition as a location. This makes relocating permanent establishments to low-tax countries less attractive for companies. We are thereby strengthening value creation, jobs and tax revenue in Austria.”
Austria takes a leading role
The digitalisation and globalisation of the economy pose significant challenges for international tax law. The answer to this is the two-pillar model developed by the OECD/G20. It primarily addresses profit erosion and profit shifting by multinational corporations that impair tax fairness.
Austria has played a driving role by pushing hard for regulations for digital companies during its EU Council Presidency. With the introduction of the digital tax in 2020, Austria has already taken national measures to ensure more fairness between the analogue and digital economies.
The first pillar of the international agreement, the redistribution of taxation rights, particularly from digital services, is still being negotiated (at the OECD/G20 level). The second pillar is the effective global minimum taxation. The states mentioned agreed on a globally valid minimum level of taxation that affects large corporate groups with group sales of at least 750 million euros. The goal: An effective tax burden of at least 15% on local income in the affected countries in which the companies operate.