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Yet these tech giants have been among those criticized as avoiding taxes by shifting their income to tax havens, such as Ireland or Bermuda.cantly below threshold. From 2010 to 2017, at a time when the baseline rate for tax around the world was 35%, they paid only 15.9% of their declared profits on taxes. And while they generate millions of dollars from the Philippines, they have paid zero in taxes to the Bureau of Internal Revenue .
In 2021, the Organization for Economic Co-operation and Development recognized the problem of tax avoidance around the world. Called “base erosion and profit shifting” , the OECD noted that multinational enterprises were exploiting tax systems by shifting their profits to countries where their income would not be subject to tax. By the OECD estimate, countries lost $100 billion to $240 billion in tax revenues due to BEPS practices.
The second pillar, on the other hand, focuses on the establishment of the Global Anti-Base Erosion rules. Under these rules, a global minimum corporate tax rate will be set at 15% and this tax would be applicable to multinational enterprises earning €750 million annually. This minimum tax is intended to ensure that multinational corporations would be liable to pay a minimum amount of tax on their income arising from each of the jurisdictions in which they operate.