Share Name Share Symbol Market Type Share ISIN Share Description
Unilever Plc LSE:ULVR London Ordinary Share GB00B10RZP78 ORD 3 1/9P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -90.50 -2.02% 4,392.50 4,400.00 4,401.00 4,492.00 4,384.50 4,476.00 2,764,141 16:35:12
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Food Producers 43,987.5 7,014.5 181.9 24.4 51,328

Corporate Tax Chiefs Voice Concerns About Global Minimum Tax Proposal

04/12/2019 2:09am

Dow Jones News


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By Nina Trentmann 

Tax chiefs at international companies are voicing concerns about a proposal that would introduce a global minimum tax and could result in higher tax payments for some companies.

The proposal is part of an effort by the Organization for Economic Cooperation and Development to revamp the international tax system by expanding and reallocating the global tax pie.

E-commerce giant Amazon.com Inc. said the new tax should be applicable to all types of business and not result in different tax rates for foreign and domestic taxpayers.

"It is important that consensus is achieved with sufficient detail to foster consistent application and avoid multi-layer taxation," the company's vice president for global tax, Kurt Lamp, said in written comments made public by the OECD on Tuesday.

The remarks, released ahead of an OECD consultation event Monday, mirror comments multinationals provided in November on a related proposal on corporate taxation for consumer-facing industries. Executives expressed concerns around the lack of detail and the possibility of sweeping changes to their global structures.

The suggested minimum tax resembles the U.S.'s Global Intangible Low-Taxed Income provision that was introduced in late 2017 and sets a minimum rate for the taxation of overseas income generated by U.S. companies.

The OECD's proposed global minimum tax would apply to companies with income from cross-border activities that pay taxes below a certain threshold. The new tax would only be relevant in cases in which companies don't pay sufficient tax on their overseas income. Otherwise, national tax laws and rates would continue to apply.

Determining at what level tax payments are sufficient could result in discussions among OECD member states, according to Manal Corwin, principal-in-charge of KPMG's national tax practice in Washington. Some countries have used low tax rates as a tool to attract multinational companies, irking jurisdictions with higher tax rates.

The OECD proposal, dubbed Global Anti-Base Erosion Proposal, or Pillar II, lacks clarity on various elements, Ms. Corwin said. "Most corporates are concerned about the level of complexity and the threat of double taxation."

"Businesses are concerned about the level of change," she added.

The OECD, which aims to have agreement among its 36 member states on the tax proposals by 2020, didn't immediately respond to a request for comment.

Many corporate tax departments still grapple with the OECD's new framework on base erosion and profit shifting -- or BEPS -- that was introduced in 2016, and with the implications of the 2017 U.S. tax overhaul.

In the comment letters released Tuesday, drugmaker GlaxoSmithKline PLC warned of additional complexities that could arise from the proposal.

"There is a risk of a significant and complex administrative and compliance burden being created in a disproportionate manner, especially in light of the existing BEPS measures that countries are still in the process of rolling out globally," GSK said in a statement made public by the OECD.

It is critical that the new proposal functions alongside existing tax regulations, GSK said.

Consumer-goods giant Unilever PLC said more details are needed. "It is difficult to form a proper view on Pillar II in its current somewhat open-ended form," wrote Janine Juggins, the company's executive vice president for global tax and treasury, and Sebastiaan de Buck, the company's vice president for tax strategy and mergers and acquisitions.

"We also question whether this proposal properly balances complexity and impact and whether instead we are on a path which prolongs uncertainty for global businesses and will weaken global economic growth," they wrote.

Danish energy company Ørsted A/S said it might be premature to introduce new tax rules, given that the OECD's new framework on BEPS only took effect in 2016. "The full effects of these initiatives cannot yet be properly assessed," Ørsted's head of tax, Karl Berlin, and its director for international and mergers and acquisitions tax, Pernille Nygaard Rasmussen, wrote.

Write to Nina Trentmann at nina.trentmann@wsj.com

 

(END) Dow Jones Newswires

December 03, 2019 20:54 ET (01:54 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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