The latest OECD tax reform will affect only 78 of the world’s 500 largest companies and only about 37 European companies, this EconPol Policy Brief reveals. The number of companies is so low, mainly because the tax applies only to companies with revenues above USD 20 billion which earn a rate of return on revenue above 10%. Reducing the revenue threshold for multinational companies from USD 20 billion to EUR 750 million would increase the number of companies affected by a factor of 13. The relative gain of reducing the threshold below USD 5 billion is small relative to the increase in the number of companies involved, the authors estimate. These are some of the key findings of the study examining the consequences of the OECD’s Pillar 1 reform.
