First, low-tax countries may not support this program. On the one hand, a tax rate of at least 15% will push countries such as Thailand, the United Kingdom, and Vietnam, which are not normally regarded as tax havens, to a safer position. On the other hand, tax havens such as Jersey, the Cayman Islands and the British Virgin Islands are most threatened by the global minimum tax rate. Since the corporate tax rate in these regions is 0%, they will be affected no matter what the tax rate is when the final agreement is reached. To complete this agreement, the reform program must be approved by some countries whose corporate tax rates are below 15%. At present, the biggest opposition comes from Ireland. Previously, Ireland has a low tax rate of just 12.5%, attracting many leading companies in technology and pharmaceuticals to set up their European headquarters there. The Irish government has stated that it hopes to maintain its original tax rate to offset some of the disadvantages when seeking foreign investment due to the country’s small size.
Second, there are many difficulties in reaching an agreement at the multilateral level. Multilateral tax cooperation is a necessary condition for the effective implementation of “global minimum corporate tax”, and it requires coordinated and concerted actions around the world. Considering the experience of the BEPS project, if there is no international unified action, a multinational company may move to another country to continue enjoying a lower tax burden.
Third, the implementation of “global minimum corporate tax rate” also has its own complexities. For example, what is an appropriate tax rate? Which form should be adopted to implement it? How broad is the tax base? How should the minimum tax be distributed among different countries? So far, there is still no mandatory multilateral agreement for the minimum tax rate in the world.
