The proposed minimum global corporate tax: what would this mean for Lithuania and its competitiveness? | Deal

With the growing weight of the digital economy in the world, the tax system has faced many challenges for decades. To traditional tax evasion schemes By uniting fully legal ways of operating in many countries and paying taxes largely in select countries, states and organizations are constantly introducing new tools to prevent this.

One of them is global corporate taxation. The most recent step in this direction has been taken by the US presidential administration, which has proposed a minimum global corporate tax rate of 21%. The idea was also publicly endorsed by the Secretary of the State Treasury, Janet Yellen.

Tax expert Kęstutis Lisauskas estimates that the probability that the world’s countries agree to a minimum tax or a similar model is more than 50 percent. And what would such an agreement mean for low-tax countries, including Lithuania, where the corporate tax rate is 15%?

How to combat the transfer of business to the digital space?

Discussions to address the tax challenges posed by companies that move part or all of their activities to the digital space focus in two directions.

A first review of the principles for sharing the tax rights of the profits obtained at an international level, evaluating the role of consumers in the process of creating business value.