Poland this month supported a joint initiative by 136 countries to develop new international taxation rules for the world’s biggest companies, including tech giants, Poland's PAP news agency reported.
The new plan by the Organisation for Economic Cooperation and Development (OECD) seeks to combat aggressive tax avoidance, known as “base erosion and profit shifting,” and is called BEPS 2.0.
Sarnowski told PAP the plan is based on two pillars. First, he said, “USD 125 billion of tax revenue, generated by the 100 or so largest global enterprises, will be reallocated to countries around the world,” ensuring these multinational corporations pay their “fair share” of tax “regardless of where they operate.”
Second, a minimum global corporate tax of 15 percent will take effect from 2023 to counteract the practice of siphoning profits off to tax havens, Sarnowski noted.
He said that, under the current rules, global companies, including tech giants, from smartphone makers through digital content platforms to streaming services, pay tax only where they were headquartered.
This usually leads to low taxation levels, he told the Polish news agency.
Poland is among the countries whose public coffers have suffered as a result, Sarnowski said, but after the overhaul, tax revenue obtained from tech giants will strengthen the budget.
The government will be able to spend these extra inflows on any socially useful policies, he added.
“The rationale behind the minimum global corporate tax is simple: if a multinational company pays less than 15 percent in a given country of operation, its parent company will shell out the difference in the country where it is based,” Sarnowski explained.
He said the details of the plan still needed to be fleshed out, such as the identity of the 100 largest global companies whose USD 125 billion in tax money will be reallocated around the world.
Meanwhile, Poland has secured some protection for foreign investors "who engage in real economic activity" and enjoy tax breaks in the country, Sarnowski emphasised, as quoted by PAP.
(pm/gs)
Source: PAP