Last week the Guardian reported that an Irish subsidiary of the US tech giant Microsoft paid no corporation tax at all last year, on profits of $315bn (£222bn). This is because Microsoft Round Island One, which collects licence fees for Microsoft software, is “resident” for tax purposes in Bermuda. Since Bermuda does not levy corporation tax, the only payout came in the form of bumper dividends for Microsoft shareholders, worth a total of $55bn. The deal to tackle global tax abuse by corporations, signed on Saturday in Cornwall, therefore signals a sea change which is of genuine significance. A minimum global corporation tax of at least 15%, as proposed, would establish a floor on what the US treasury secretary, Janet Yellen has described as “a 30-year race to the bottom on corporate tax rates”.

Source: The Guardian June 06, 2021 17:31 UTC