Canada is taking steps to comply with a 15 percent global minimum tax on multinational companies starting in 2023, but a report says the new regime could adversely affect Canadian wealth and tax revenues and make countries vie for the international taxes on a “first-come, first-served” basis.
The C.D. Howe Institute’s May 31 report, written by Angelo Nikolakakis, a partner with international law firm EY Law, says that if Canada doesn’t make “other strategic adjustments,” it “will likely be impoverished.”
The global corporate minimum tax scheme championed by the Organisation for Economic Co-operation and Development (OECD) and G20 consists of two pillars. Pillar One allocates new taxing rights to countries where about 100 of the world’s largest multinational enterprises (MNEs) operate. Pillar Two establishes a minimum tax of 15 percent on MNEs that have annual consolidated revenues of $750 million euros (C$1 billion), which includes many Canadian MNEs. …