Global Minimum Tax

This workshop will address the global minimum tax, an agreement that more than 130 countries committed to implement in October 2021. The global minimum tax is intended to prevent companies from shifting profits to countries with lower tax rates by establishing a minimum corporate tax rate of 15% at the global level. The tax is designed as a two-pillar system. Pillar one involves profit allocation rules for large, profitable multinational companies and aims to redistribute excess profits to jurisdictions where consumers or users are located, regardless of the physical presence of the firms in those jurisdictions. This is very important for companies operating in the digital sector.

On the other hand, pillar two requires that if a multinational company is paying a corporate tax below 15% because the country where it is located has a lower corporate tax rate, the company must pay a top-up tax to increase the rate to 15%. The implementation timeline for pillar one is set for mid-2023, and for pillar two, in 2024 at the earliest. As almost all economies in South East Europe currently have corporate tax rates below 15%, the global minimum tax will have significant implications for them. This workshop aims to clarify the issues surrounding the implementation of the global minimum tax and its potential impact on South East European economies.

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