The increase in additional tax revenue from OECD’s international tax reform would be rather ‘moderate’ for Germany, Florian Neumeier, Head of the ifo Research Group Taxation and Fiscal Policy, has said.
According to a report by the Ifo Research Group on Tax and Financial Policy, the OECD’s proposals for reforming international corporate taxation will bring Germany additional tax revenue of EUR 2.4–3.4 billion per year.
“According to our estimates, Germany would be a beneficiary of the reform. But the increase in additional tax revenue would be rather moderate,” Neumeier said.
The findings reveal that the introduction of the global minimum tax rate (Pillar Two) would bring Germany tax revenue of between EUR 1.5 billion and EUR 1.7 billion.
“Considering the latest agreements regarding the details of the global minimum tax rate, we expect the additional tax revenue to be at the lower end of our original estimates,” Neumeier said.
The report also examines the financial effects of the planned redistribution of taxation rights between countries (Pillar One). These are associated with additional tax revenue for Germany to the tune of between EUR 0.85 billion and EUR 1.7 billion per year.
The report was commissioned by Germany’s Finance Ministry.