Last week, the OECD announced a groundbreaking shift in global policy in which 136 countries agreed to a new Global Minimum Tax of 15%. This landmark agreement has massive implications for the global community helping stop the race to the bottom for corporate tax rates.
Part of this announcement was another key driver in change for global taxation in regards to digital tax reform. While secondary to the Global Minimum Tax, the impact this reform has will be widespread and continue to grow in importance as the world becomes more digitally connected. The general concept is that large digital companies such as Amazon, Facebook, and Alphabet will now be subjected to taxes based on where value is being generated regardless of a physical presence. Thus opening new avenues for appropriately taxing these digital giants.
With tax authorities having until 2023 to implement these changes, practitioners can look to recent regulatory history in the US to predict what implications there may be. When looking at recent changes to the US tax code, specifically BEAT and GILTI, you can identify trends that have already occurred during sweeping changes to tax law. Upon their ratification, many US companies took part in large-scale restructurings to better position themselves with the new system. To do so, they relied on companies such as ktMINE to provide actionable data to ensure any agreements born out of these restructures were done so as if independent parties were involved.
Having experienced many changes to tax law, ktMINE has uniquely positioned itself to address questions that may arise. Hosting the largest repository of agreement data, ktMINE can help ensure users are not missing any public evidence to support their internal transactions. Going beyond licenses also grants users the ability to truly see the complete picture and answer deeper questions not easily attainable from the market.