Multinational companies should pay a minimum level of tax regardless of where they operate.
Bührle and Casi
The tax race is not over
The global minimum tax was meant to curb profit shifting. But for many companies, it has primarily become something else: a new and complex reporting system.
The tax race is not over
The global minimum tax was meant to curb profit shifting. But for many companies, it has primarily become something else: a new and complex reporting system.
The global minimum tax, introduced in Norway in 2024, was intended to stop the race to the bottom in international corporate taxation. The agreement on a global minimum tax is a unique example of international cooperation, with an unusually broad coalition of countries behind a common framework. But the OECD reform has created a new problem: greater complexity, higher costs and a form of tax competition that is shifting from low tax rates to deductions and special regimes.
This is shown in new European research, recently presented at a tax conference at NHH.
At its core, the principle is sensible: multinational companies should pay a minimum level of tax regardless of where they operate. But what may look like a technical adjustment is in reality beginning to change how companies organise their tax work internally, how authorities collect and use information, and how countries compete for companies and investments.
As in many debates on tax policy, the main challenge is not simply to close loopholes. The real challenge is to decide which trade-offs we are willing to accept. Profit shifting through transfer pricing, intra-group debt and intangible assets has long been a major problem.
Global tax revenue losses as a result of profit shifting are estimated at between USD 100 billion and USD 240 billion a year. Studies using Norwegian data suggest that Norway loses between six and eight per cent of its corporate tax revenues as a result of profit shifting.
Calls for debate on EU tax policy
`Fragmented tax rules hinder the free movement of goods, services, capital and labour,´ says Theresa Bührle, one of the researchers behind a new EU report that will be presented in Brussels next year.
However, research indicates that some of these rules reduce investment, move real economic activity between countries and affect how companies finance themselves.
This is the classic dilemma: how do we protect the tax base without weakening economic activity?
But, as is so often the case in tax policy, much depends on the details.
First, the minimum tax is not fully binding. Companies can exclude parts of their income from the calculation if that income is linked to real economic activity. In addition, compliance costs are high. Even companies that do not engage in aggressive tax planning have to invest heavily in systems, reporting processes and expertise in order to comply with the rules.
In Norway, companies report substantial internal work, high advisory costs and complex reporting requirements — often without any additional tax actually being triggered.
Tax disclosure requirements: Appeared transparent, little changed
A new UK regulation was intended to make large companies more transparent about their tax practices. The result? More reporting and polished language, but not more real insight.
But the most important consequences go far beyond compliance and tax revenues.
Under the global minimum tax, companies must calculate effective tax rates using a mix of tax rules and accounting rules — what is in practice described as a kind of “third set of books”.
For the first time, corporate taxation is being linked directly to financial accounts. This forces companies to organise themselves in new ways internally: tax, accounting, finance and IT functions must work together to calculate the tax base itself. What was previously a reporting task is becoming part of companies’ central financial decision-making.
Multinational companies should pay a minimum level of tax regardless of where they operate.
Bührle and Casi
At the same time, tax authorities are undergoing their own transformation. Information received from abroad is no longer used only for control and audits after the fact — it is now helping to determine the tax base directly. This changes what tax authorities actually do. Instead of primarily checking information retrospectively, they must now process, coordinate and rely on large volumes of foreign information in real time.
In practice, this requires new expertise, better data quality and new organisational structures. Tax administrations must build teams that combine legal, accounting and technological expertise, while also developing systems capable of handling complex and still unfinished reporting requirements.
In other words, the reform is changing not only how companies are taxed, but also how tax administration itself works.
The op-ed was first published in Dagens Næringsliv.
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