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The global minimum tax is one of the most significant international tax reforms in decades.
Spearheaded by the Organisation for Economic Co-operation and Development (OECD), the idea is to ensure that large multinational companies pay a minimum level of tax no matter where they are based.
This avoids a race to the bottom, where countries compete to offer the lowest corporate tax rates.
In recent days, momentum has been building as several countries progress towards implementing this tax reform.
The global minimum tax sets a floor of 15% for corporate taxation.
It targets companies with annual revenues above €750 million and seeks to prevent profit-shifting to low-tax jurisdictions.
Under this framework, if a company pays less than 15% tax in one country, other countries can top up the tax to ensure the minimum rate is met.
In the last 24 hours, finance ministries across Europe, Asia, and North America have released updates on their plans to adopt the minimum tax by the 2025 deadline.
Germany and Japan have already passed legislation. Canada, the UK, and Australia have published consultation papers or draft legislation.
The European Union previously agreed a directive for member states to adopt the rules.
There are still some hurdles. For instance, implementation in the United States has been politically contentious.
However, many countries are pushing forward regardless, recognising the global shift towards fairness and transparency in taxation.
The reform is designed to create a level playing field.
For years, tech giants and global brands have paid minimal taxes in the countries where they operate, using complex structures and tax havens.
The global minimum tax could yield billions in additional tax revenue for governments worldwide.
It also discourages the creation of artificial business structures solely for tax reasons.
Some critics argue that 15% is still too low and may legitimise tax avoidance rather than stop it.
Others worry about the compliance burden, especially for companies operating in multiple jurisdictions.
There are also concerns from smaller, low-tax countries that rely on competitive tax rates to attract investment.
The global minimum tax marks a shift in how we think about corporate taxation.
It’s no longer just a national issue but a global one.
While challenges remain, the recent wave of implementation activity shows that change is truly underway.
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When most people hear the word “tax”, they think of income tax or VAT.
But there’s a growing type of tax that’s all about saving the planet: environmental taxation.
The OECD (Organisation for Economic Co-operation and Development) has recently published a report highlighting just how important environmental taxes are in the fight against climate change.
It’s not just about collecting money – it’s about changing behaviour, reducing pollution, and encouraging greener choices.
Environmental taxes are charges placed on activities that harm the environment.
They’re designed to make polluters pay, encourage people and businesses to use cleaner technologies, and help governments fund green projects.
There are several types:
Carbon taxes: charges on greenhouse gas emissions
Fuel and energy taxes: extra costs for using petrol, diesel, or electricity from non-renewable sources
Waste taxes: charges for landfill use or plastic packaging
Air travel taxes: added costs on plane tickets, especially for short-haul or high-emission flights
The OECD’s latest report says that environmental taxes are still underused – even though they could be a powerful tool.
Across the OECD’s 38 member countries, environmental taxes made up just 5.6% of total tax revenue in 2022.
That’s barely changed in a decade.
The report argues that countries need to go further, faster.
With climate goals becoming more urgent, and the need for green investment growing, environmental taxes could play a much bigger role – if politicians are brave enough to act.
Let’s take carbon taxes as an example.
These work by making it more expensive to emit carbon dioxide (CO₂).
The idea is that if businesses have to pay extra for polluting, they’ll try harder to cut their emissions – for example, by switching to clean energy or improving efficiency.
Some countries already have strong carbon taxes – Sweden is a leader, charging over €100 per tonne of CO₂.
Others are lagging behind, or don’t charge anything at all.
Environmental taxes can be very effective. They encourage greener choices and raise money for eco-projects.
But they can also be politically risky.
People don’t like seeing fuel prices go up, or paying more for flights.
That’s why the OECD recommends using the money raised from green taxes to help people – for example, by cutting income tax or giving rebates to low-income families.
That way, the taxes don’t feel like a punishment, but part of a bigger plan to make society greener and fairer.
Canada has a national carbon tax and returns the money to households as a rebate.
France had to pause a fuel tax after widespread protests (the “Gilets Jaunes”).
Germany recently increased its air travel taxes and uses the money to subsidise rail travel.
These show how different countries are trying to strike the right balance.
Environmental taxes are not just about raising revenue – they’re a tool to reshape economies for a greener future.
The OECD’s message is clear: countries need to get serious about using taxes to fight climate change.
But they also need to do it in a way that’s fair, transparent, and doesn’t leave people behind.
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The US Internal Revenue Service (IRS) has announced a significant win in its effort to crack down on unpaid taxes from wealthy individuals.
Over the past year, it has recovered more than $1.3 billion in back taxes from high-net-worth taxpayers.
This success is part of a wider effort to ensure that everyone pays their fair share – especially those with the means to hire teams of lawyers and accountants.
It also highlights how better funding and smarter enforcement are helping the IRS close the so-called “tax gap”.
The IRS didn’t name names, but the people involved are high-income earners – those earning over $1 million a year.
Many of them had complex financial arrangements, offshore accounts, and business structures that made their affairs hard to track.
In some cases, they simply didn’t file tax returns for several years.
In others, they understated their income or over-claimed deductions.
Thanks to improved technology, data-sharing, and enforcement, the IRS was able to identify and pursue these individuals more effectively.
In recent years, the IRS has been given more resources to tackle tax evasion among the rich.
As part of the Inflation Reduction Act, Congress approved billions in funding for modernising the agency and stepping up audits on high earners.
The IRS is now using:
AI and data analytics to detect suspicious patterns;
Information-sharing agreements with other countries;
Stronger audit teams with a focus on complex returns;
And a better whistleblower programme to tip them off.
This combination is making it harder for the wealthy to hide income or delay payment.
The tax gap is the difference between what the government is owed and what it actually collects. In the US, it’s estimated to be over $600 billion a year – a large chunk of that from high-income individuals.
By focusing on this group, the IRS isn’t just collecting more revenue – it’s also sending a message that the tax system should be fair, and no one is above the law.
Unsurprisingly, not everyone is happy.
Some critics argue that the IRS is becoming too aggressive.
Others say the real problem is a complicated tax code that invites loopholes and avoidance.
But many see this as a necessary step to restore public trust — especially when ordinary taxpayers are held to strict deadlines and penalties.
The recovery of $1.3 billion from wealthy taxpayers shows what’s possible when the IRS has the tools and funding to do its job properly.
It’s a reminder that even the most complex financial arrangements can be unwound – and that efforts to enforce tax compliance are stepping up.
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In a landmark decision, the European Court of Justice (ECJ) has ruled that Apple must pay €13 billion in back taxes to Ireland.
This verdict concludes a prolonged legal battle concerning tax arrangements between Apple and the Irish government, which the European Commission deemed as unlawful state aid.
The dispute dates back to 2016 when the European Commission concluded that Ireland had granted Apple undue tax benefits, allowing the tech giant to pay substantially less tax than other businesses.
Specifically, Apple was accused of funnelling profits through Irish subsidiaries to reduce its effective tax rate to as low as 0.005% in certain years .
Both Apple and the Irish government contested the Commission’s decision, arguing that the tax arrangements were in line with Irish and international tax laws.
However, the ECJ’s recent ruling upholds the Commission’s stance, asserting that the tax benefits conferred upon Apple constituted illegal state aid.
The ruling places Ireland in a complex position.
While the country stands to receive a significant financial windfall, equivalent to approximately 14% of its annual public spending, it also faces scrutiny over its tax practices .
Ireland has long attracted multinational corporations with its favourable tax regime, and this decision may prompt a reevaluation of such policies.
The Irish government has expressed concern that enforcing the back tax payment could impact its reputation as a stable and predictable environment for business investment.
Nonetheless, the ECJ’s decision is final, and Ireland is now obligated to recover the unpaid taxes from Apple.
Apple has consistently denied any wrongdoing, maintaining that it has complied with all applicable tax laws.
Following the ECJ’s ruling, the company expressed disappointment but indicated its intention to adhere to the decision.
Apple emphasized its significant contributions to the Irish economy, including job creation and investment.
This case underscores the European Union’s commitment to ensuring fair taxation and preventing preferential treatment of multinational corporations.
It also highlights the challenges nations face in balancing competitive tax policies with obligations to uphold equitable tax practices.
The decision may influence other countries to scrutinize their tax arrangements with large corporations more closely.
It also aligns with global efforts, such as the OECD’s initiatives, to combat base erosion and profit shifting (BEPS) and promote transparency in international taxation.
The ECJ’s ruling marks a significant moment in the ongoing discourse on corporate taxation and state aid within the European Union.
As Ireland moves to recover the €13 billion from Apple, the case serves as a reminder of the importance of transparent and fair tax practices in the global economy.
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A dramatic tax case is making headlines in the United States, involving an American defence contractor accused of one of the largest individual tax evasion schemes in US history.
Douglas Edelman, aged 73, has been charged with hiding over $350 million in income and evading around $129 million in taxes.
But how did this happen, and what can it teach us about offshore planning, disclosure obligations, and the risks of aggressive tax avoidance?
Douglas Edelman is a former defence contractor who made substantial profits through contracts and private equity deals, some of which related to the reconstruction of Iraq.
Rather than declare these profits to the Internal Revenue Service (IRS), prosecutors allege that Edelman used a web of offshore structures and foreign bank accounts to hide his income.
The scale of the case is staggering: prosecutors claim that Edelman channeled income through shell companies in tax havens and failed to report over $350 million in gains.
According to US authorities, this led to an unpaid tax bill exceeding $129 million over multiple years.
Edelman is accused of using offshore trusts and foundations, along with nominee owners, to obscure his control over the assets.
These structures, while not illegal in themselves, must be reported to the IRS by US persons if they hold beneficial ownership or control.
The charges against him suggest that he deliberately concealed his interests to avoid both reporting and taxation.
He’s also accused of making false statements to US authorities, failing to file accurate tax returns, and omitting required disclosures of foreign bank accounts (FBARs).
These are serious charges and carry the potential for both civil penalties and criminal prosecution.
This case is being watched closely by tax professionals around the world, not just because of the sums involved, but because it signals the continuing intensity of enforcement efforts against offshore tax evasion.
In the post-FATCA world, financial institutions are now required to report US-held accounts to the IRS. That means hiding money offshore has become much riskier.
This case is a reminder that opacity is no longer a reliable strategy, and that wealthy individuals are being held to account, even for historical conduct.
The Edelman case also reinforces the message that using offshore structures to disguise ownership or control — especially when done knowingly — can lead to serious consequences.
The Douglas Edelman case is a clear signal to taxpayers and advisers: international enforcement of tax compliance is only getting stronger.
Whether through FATCA, CRS, or whistleblower tip-offs, tax authorities are increasingly able to uncover hidden wealth.
While legitimate international tax planning remains lawful, this case shows what can happen when disclosure rules are ignored or abused.
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The UK’s Digital Services Tax (DST) has found itself back in the spotlight – not because of domestic criticism, but due to international trade tensions, particularly with the United States.
As part of ongoing trade negotiations, the UK is reportedly considering watering down or scrapping the DST altogether.
But why was the DST introduced in the first place, and what’s at stake if it’s removed?
The DST was introduced in April 2020 as a targeted 2% tax on the revenues of large digital businesses that make money from UK users.
This includes tech giants that operate search engines, social media platforms, or online marketplaces – companies like Google, Facebook, and Amazon.
Rather than taxing profits (which can be easily shifted to low-tax countries), the DST taxes turnover linked to UK users, making it harder to avoid.
However, it only applies to companies with global revenues over £500 million and at least £25 million from UK digital activity.
This means it’s carefully aimed at the biggest players in the market.
While the DST has raised hundreds of millions in tax revenue, it hasn’t been without controversy.
The US government has accused the UK – and other countries with similar taxes – of unfairly targeting American tech companies, arguing that it violates trade agreements and discriminates against US businesses.
In response, the US has previously threatened retaliatory tariffs. Although these haven’t materialised, they remain a real possibility.
As trade talks resume between the UK and US, the UK’s DST has become a bargaining chip.
There are reports that the UK is considering scrapping or softening the DST in exchange for smoother trade relations and a broader deal.
The future of the DST may depend on progress with the OECD’s global tax agreement – particularly Pillar One, which aims to reallocate taxing rights so that countries can tax companies where they have customers, not just where they book profits.
If that framework is implemented, many countries (including the UK) have agreed to withdraw their unilateral DSTs.
But progress at the OECD has been slow, and with elections on the horizon in several key countries, further delays are likely.
Until then, the UK government must weigh up domestic tax fairness against international diplomacy.
The UK’s Digital Services Tax was designed to ensure that tech giants pay their fair share where they operate.
But under pressure from international allies – and particularly from the US – the UK may soon reconsider its approach.
Whether the DST survives may ultimately depend on the success of broader global tax reforms.
If you have any queries about this article on Digital Services Tax, or tax matters in the United Kingdom then please get in touch.
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Cyprus has carved out a strong reputation among internationally mobile individuals – not just for its climate and lifestyle, but also for its simple and tax-efficient personal tax regime.
With moderate income tax rates, a generous non-domicile regime, and no wealth or inheritance taxes, the island remains an attractive base for entrepreneurs, professionals, and retirees alike.
Cyprus taxes individuals on their worldwide income once they become tax resident.
The standard rule is based on 183 days of physical presence in a calendar year.
However, there is also a 60-day tax residency rule for those who don’t have tax residency elsewhere, provided certain conditions are met (e.g., owning or renting a home in Cyprus and having business or employment ties here).
The Cyprus income tax system is progressive:
This structure delivers relatively low effective tax rates, especially when compared with Western Europe.
The tax-free threshold is one of the highest in the EU and is due to increase to €20,500 as part of upcoming reforms.
There are also specific incentives for newcomers, including:
These measures are designed to make Cyprus appealing to internationally mobile professionals and business owners considering relocation.
Perhaps the most powerful personal tax advantage available in Cyprus is the non-domicile regime.
A person who becomes a Cyprus tax resident, but is not domiciled in Cyprus, is exempt from tax on dividends and interest income– both from Cyprus and abroad.
This regime lasts for up to 17 years and also applies to most types of foreign capital gains (e.g., share sales), although gains on Cyprus real estate remain taxable.
Crucially, this means a non-domiciled tax resident of Cyprus can potentially live tax-free on investment income while remaining within the EU, and under a tax regime that is fully compliant with international standards.
For those looking to base themselves in a stable, English-speaking EU country, Cyprus offers a very appealing personal tax profile.
From income tax incentives to the non-domicile regime and a complete absence of wealth and inheritance taxes, the structure is simple, credible, and tax-efficient.
If you have any queries regarding this article on Personal Tax in Cyprus, or any other Cypriot tax matters, then please get in touch.
Tesco, the UK’s largest supermarket chain, has announced plans to slash £500 million in costs as it prepares for a new wave of business tax changes.
The move reflects a growing concern among large retailers about the fiscal direction of the UK government under Chancellor Rachel Reeves.
But what’s behind the numbers, and how do tax changes ripple through corporate decisions like this?
Tesco’s cost-cutting initiative isn’t coming out of nowhere.
The supermarket is reacting to rising wage bills, supply chain pressures, and most notably, anticipated increases in corporate taxation and regulation.
With the Chancellor signaling a shift towards raising tax revenue to support public services, businesses like Tesco are re-evaluating their internal budgets to maintain competitiveness and shareholder value.
While the details of the tax rises haven’t been fully set out, there is speculation that changes to capital allowances, business rates, or even energy levies for commercial properties may form part of the package.
The UK government has increasingly looked to large businesses to shoulder a greater portion of the tax burden, especially post-pandemic.
Corporation tax already rose to 25% in 2023 for companies with profits over £250,000.
While this may not hit all businesses equally, for a company with billions in revenue, even a few percentage points can mean hundreds of millions in additional liabilities.
Tesco’s announcement suggests that boardrooms across the UK are now preparing for more active fiscal policymaking – potentially reversing years of relative tax stability.
For consumers, this could mean further price pressures as businesses pass on costs.
For business owners, especially in retail and property-heavy sectors, it’s a reminder that corporate tax policy matters – and can influence hiring, investment, and expansion plans.
Tax changes at the top of the economy inevitably flow downward.
Tesco’s £500 million cost reduction plan is a bellwether for broader shifts in UK business taxation.
While not yet fully defined, the Chancellor’s emerging fiscal approach is already causing ripple effects among the UK’s largest employers.
Companies – and their advisers – will need to stay alert as more policy detail emerges over the coming months.
If you have any queries about this article on corporate tax in the UK, or tax matters in the United Kingdom then please get in touch.
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Cyprus continues to be one of the most attractive jurisdictions in Europe for internationally minded business owners and entrepreneurs.
A key part of that appeal is the headline corporate income tax rate of 12.5% – one of the lowest in the European Union.
While Cyprus has introduced the OECD’s Global Minimum Tax (GMT) at 15% for large multinational groups, most businesses – including startups, owner-managed consultancies, and investment holding companies – will continue to pay tax at just 12.5%.
A Cyprus tax-resident company pays 12.5% corporate income tax on its worldwide income.
The rate is flat – there’s no progressive scale, no local surcharges, and no minimum alternative tax. It’s a clean, single-rate system.
Importantly, Cyprus offers a range of generous exemptions and deductions that can reduce the effective rate even further. For example:
These features make the Cyprus tax system especially well-suited to holding companies, IP-owning entities, and group financing arrangements – all operating under a mainstream, EU-compliant framework.
Cyprus has also incorporated the OECD’s Pillar Two Global Minimum Tax into its domestic law.
From 2025, this will apply to multinational enterprise (MNE) groups and large domestic groups with consolidated annual revenues over €750 million.
For those groups, Cyprus will apply a minimum effective tax rate of 15% – either through a domestic top-up tax or via the income inclusion rule.
This ensures that large MNEs pay a globally consistent rate, in line with international commitments.
It’s worth emphasising that these rules only apply to large groups meeting the €750m revenue threshold.
Smaller and mid-sized companies, including most Cyprus-based businesses and foreign-owned investment vehicles, are entirely unaffected and will continue to enjoy the standard 12.5% rate – along with all existing exemptions and incentives.
Cyprus does not impose artificial hurdles or excessive formalities.
To be tax-resident, a company must be managed and controlled in Cyprus – typically achieved by having local directors, board meetings in Cyprus, and a registered office.
For many internationally mobile founders and investors, these requirements are both manageable and cost-effective.
There’s also a solid legal and advisory framework, straightforward electronic filing, and a stable policy environment.
Cyprus has been consistent in its messaging: it remains committed to maintaining its competitive corporate tax regime, and to supporting genuine economic activity.
For internationally mobile entrepreneurs, Cyprus continues to offer a credible, compliant, and highly competitive corporate tax environment.
The 12.5% tax rate remains in place for the vast majority of businesses, supported by full exemptions for investment income, a growing treaty network, and incentives for equity and innovation.
While large multinationals will be subject to the 15% Global Minimum Tax, Cyprus has chosen to apply those rules narrowly and proportionately – without disrupting the core advantages that have made the jurisdiction so attractive to businesses worldwide
If you have any queries on this article about Corporate Tax in Cyprus, or tax matters in Cyprus more generally, then please get in touch.
Ireland has long been a magnet for multinational companies.
With its 12.5% corporate tax rate, English-speaking workforce, and EU membership, it became home to the European headquarters of major tech giants like Apple, Google, and Meta.
But global tax reform – particularly the OECD’s minimum tax initiative – is changing the rules of the game.
What does this mean for Ireland’s economy and its future as a hub for international business?
For over two decades, Ireland’s 12.5% corporation tax rate has been a key pillar of its economic policy.
It attracted foreign direct investment (FDI), created tens of thousands of jobs, and turned Dublin into a global business centre.
But critics argued that it also allowed companies to shift profits into Ireland, reducing their global tax bills and depriving other countries of revenue.
In 2021, over 130 countries – including Ireland – agreed to implement a global minimum corporate tax rate of 15% on large multinational companies (those with global revenues over €750 million).
This is known as Pillar Two of the OECD’s global tax agreement.
Ireland initially resisted the change, concerned it would reduce its competitive edge. But after securing a carve-out that allows the rate to remain at 12.5% for smaller companies, Ireland signed up.
From 2024, Ireland will apply the 15% minimum tax to large multinationals operating there.
This means that even if a company benefits from local incentives or deductions that lower its effective tax rate, a “top-up” tax will apply if the global rate falls below 15%.
This change is highly significant for Ireland. While the government expects the country to remain attractive – due to its talent, EU access, and stable legal system – some economists warn that the golden era of FDI-driven growth may cool slightly.
In response, the Irish government is focusing more on long-term, sustainable growth through infrastructure, education, and innovation, rather than relying purely on tax competitiveness.
For large companies already in Ireland, the tax bill is likely to rise slightly, especially if they were benefiting from preferential structures.
But for small and medium-sized businesses — including many Irish companies — the 12.5% rate continues to apply.
That means Ireland still offers one of the most attractive environments for smaller international businesses looking for an EU base.
Ireland’s place in the global tax landscape is evolving. It remains a strong destination for business, but the days of ultra-low tax planning through Ireland are being replaced by a more level playing field. As the OECD’s global tax framework beds in, Ireland’s future success will depend on more than just its tax rate — and that’s not necessarily a bad thing.
If you have any queries about this article on corporate tax reform, or tax matters in Ireland then please get in touch.
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