Tax Revenue from Pillar One Amount A: Country-by-Country Estimates

Mona Barake (1, 2) , Elvin Le Pouhaër (1)

1 EU Tax - EU Tax Observatory
2 PSE - Paris School of Economics

This paper presents simulations of the tax revenue arising from the Pillar One Amount A proposal of the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting. Amount A aims at revising taxing rights on multinational enterprises with at least e20 billion in revenue and with profitability above 10%. We consider the latest available Amount A rules and use a variety of databases (Forbes 2000 list of largest companies, Orbis database, OECD AMNE data, OECD CbCR data). In a first step, we identify the MNEs that would be covered by Amount A. Then, we approximate the destination-based revenues of MNEs in different jurisdictions, to determine reallocated profits. In a final step, we account for double taxation relief to obtain the net revenue from Amount A. We find that the total amount of additional tax revenue arising from Amount A is around e15.6 billion. We provide detailed country-specific estimates and a comparison to digital taxes. The extent of taxing rights redistribution induced by Amount A is affected by (a) the inclusion criteria of covered MNEs; (b) the reallocation parameter of 25%.

Keywords: Pillar One Amount A; Two-Pillar Solution; International Taxation

Domains: Humanities and Social Sciences

Mona Barake, Elvin Le Pouhaër. Tax Revenue from Pillar One Amount A: Country-by-Country Estimates. 2023. ⟨halshs-04039288⟩