The Global Minimum Tax Raises More Revenues than you Think, or Much Less

The OECD's proposal for a global minimum tax (GMT) of 15% aims for a reversal of a decline of corporate tax rates. We study the revenue eects of the GMT by focusing on strategic tax setting eects. The direct eect from less prot shifting increases revenues in high-tax countries. A secondary eect, however, is that the value of attracting foreign investments increases, which intensies tax competition. We show that when governments compete via lump sum subsidies, the revenue gains from less prot shifting are exactly oset by higher subsidies. When competition is by corporate tax rates, revenues may increase however.