The economies of the UK, the US, Spain, the Netherlands and China stand to benefit from global corporate tax proposals being discussed by international leaders at this weekend’s G7 summit in Cornwall.
Using a complex methodology, including data on productivity, imports and investment to estimate the likely impact of the minimum 15% tax rate, trade analysts at Euler Hermes identified Spain, Poland, China and the Netherlands as clear winners; the US, the UK, Russia and Italy as relative winners; and Ireland, Brazil and Hungary among the clear losers from the deal.
“Though the eventual implementation of this agreement will take a long time because of ratification issues, the initiative represents a unique moment of global fiscal convergence,” the report states. “In the long run, the global minimum tax rate for MNEs could impact economies’ potential growth via different channels.”
These include the capital repatriation or productivity growth channels, terms of trade, public debt, public investment and corporate tax revenue of redistribution.
Chart shows predicted difference in GDP growth for each country should the corporate tax proposals come into effect (Source: Allianz research, Euler Hermes calculation)
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