forward – WU Alumni Magazin 2/2021

STEUERPOLITIK | TAX POLICY
Ein Ziel der Steuerpolitik: Den
Steueroasen das Wasser abgraben.
One goal of tax policy: to drain the
lifeblood of tax havens.
Nevertheless, how in the future can governments prevent
multinational companies and digital corporations from avoiding
paying tax on their profits?
Kofler: Ideally, you need an international consensus. A few
years ago, the OECD defined 15 action points as part of the BEPS
project (Base Erosion and Profit Shifting) to prevent aggressive
tax avoidance and profit shifting. This discussion has now
evolved in two directions: on the one hand, whether and what
share of the profits of multinational corporations should go to
countries whose consumer or user markets they are selling to.
And on the other, whether there should be a global minimum
tax rate. Currently, almost 140 countries are working on these
issues under the OECD’s Inclusive Framework. It’s interesting
to note that the original focus on digital companies has largely
been abandoned. Today the traditional economy is also so digitalized
that any such distinction would not only be difficult to
define but also misleading.
What will be the impact of the EU’s country-by-country
reporting requirement on taxation?
Eberhartinger: This means that in their consolidated financial
statements, multinational groups must disclose the specific
profit and turnover achieved in individual countries and how
much tax they pay. But it’s not yet clear what will be the impact
of such disclosure. The intended effect is that transparency
will pressurize companies to justify their actions. And indeed,
companies often worry about reputational damage. However,
I’m dubious about whether such mandatory disclosure will
influence consumers’ purchasing decisions. After all, examples
such as Starbucks or Amazon show that media discussion of
tax avoidance – including calls for boycotts – has not actually
reduced sales. Tax scholars have not yet been able to determine
any clear damage to corporate reputations. And investors, on
the other hand, are likely to want companies to reduce their tax
bills because this will lead to higher dividend payouts. Together
with colleagues, I conducted a study on banks, which since 2013
have been obliged to publish country-by-country reporting
(see “Real Effects of Public Country-by-Country Reporting and
the Firm Structure of European Banks”, in: WU International
Taxation Research Paper Series No. 2020-01). We were able to
show that banks have indeed withdrawn from tax havens.
Would a worldwide minimum tax rate as proposed by the
OECD and now also by U.S. President Joe Biden help to
ensure the fairer taxation of corporations?
Eberhartinger: A minimum rate of taxation definitely has
advantages: it drains the lifeblood of tax havens. But there
are also disadvantages, because some countries, for example
in Central and Eastern Europe, use tax competition to attract
business and boost their home
A minimum
rate of taxation
definitely has
advantages:
it drains the
lifeblood of tax
havens.
economies. Also, a minimum
taxation scheme can penalize
highly efficient, lean states.
Why should a government be
forced to collect more tax than it
needs? The U.S.A. has certainly
taken up the issue for reasons of
self-interest and protectionism.
President Biden wants to raise
the national rate of corporate
tax to 28 percent; yet this relatively
high level would place
American companies at a disadvantage
on the international market. And so Joe Biden has
suggested that other countries also raise their rates. But ultimately,
his initial proposal of a minimum tax rate of 21 percent
was simply too high; we’ll see if the newly suggested level of 15
percent can prevail. Some countries, such as India, have already
said that they are not going to comply.
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