World tax rewrite can raise countries’ revenues by $100bn: OECD

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World tax rewrite can raise countries' revenues by $100bn: OECD Afro News WireRewriting international corporate tax rules could jack up governments’ tax revenues by up to 4 percent, or $100bn annually, the Organisation for Economic Co-operation and Development (OECD) estimated on Thursday.

The OECD offered the estimates for the nearly 140 governments that agreed earlier this month to negotiate the first major update international corporate tax rules by the end of the year

Many governments are frustrated that the rise of big internet companies like GoogleFacebook and Amazon is depriving them of revenue because they can legally book profits in low-tax countries regardless of where their customers are.

The Paris-based OECD said that the revenue gains it expected from the overhaul of the rules were “broadly similar across high, middle and low-income economies”.

The OECD did not give revenue estimates for specific countries. But it said the new rules would hit offshore tax havens particularly hard. Offshore tax havens are where multinationals can currently park profits beyond the reach of tax authorities at home.

In the absence of updated rules, a growing number of countries are pushing ahead with plans to impose their own national tax on digital service companies. That’s raising tension with Washington, which says such levies discriminate against United States companies.

“Failure to reach a consensus-based solution will lead to unilateral measures and greater uncertainty,” warned OECD head of tax policy and statistics David Bradbury, as he delivered the findings of the report.

The OECD estimated most of the additional revenues would come from plans for a minimum corporate tax rate, noting that it also depended on what rate governments agreed on.

Plans to give governments the right to tax a bigger share of profits in the country where customers are located would yield small revenue gains for most countries, the OECD said.

More than half the profit shifted to countries where the client is based under the proposed changes would come from 100 international groups.

The OECD said its estimates drew on data from more than 200 jurisdictions and more than 27,000 multinationals. The results were based on the assumption that the agreed-to tax overhaul would be mandatory for all companies.

The US, however, has suggested that companies should be free to decide whether to abide by the policy- a proposal that enjoys no support from other countries.

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