The ITPF News Blog is managed by the students at the University of Florida Levin College of Law International Tax LLM Program.
By David Fickling
There’s a simple test for whether international moves to crack down on tax avoidance announced over the weekend are going to be effective: Check the stock market. After all, at their core, the measures announced by the Group of Seven nations represent a plan to reduce the profits of major multinational companies. For a company like NVidia Corp., which paid an effective tax rate of 2.63% over the most recent 12-month period, news that the world’s largest economies are planning to implement a tax floor of 15% ought to represent a substantial hit to future earnings. There’s no sign that’s happening yet. If anything, the renewed likelihood of a global tax agreement since the Organization for Economic Cooperation and Development came out with detailed plans for such a deal last October and President Joe Biden was elected the following month has only increased the valuation premium for companies that, on paper, will lose out.
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