His book on offshores – Paradis Fiscaux (just in French so far);
Pascal offers there to have a look in the kitchen of the largest tax decisions globally – US tax reform, both Pillars, etc.
his new role at Brunswick to help companies to present their financial statements and tax reporting in a reader friendly language;
for more than 10 years there is a public attention to taxation of large companies;
companies now must not only pay more attention to taxation, but pay attention to explaining it to a larger public;
tax people know the law, but public just considers fairness – so, there is a gap that need to be bridged.
Success of development of Singapore;
the ease of doing business in Singapore has been impressive;
the low taxation system has been only a part of the story;
AI and taxing data;
there was a debate that extracting data is the new gold, like people used to extract minerals, and we should tax that new gold;
actually the value is in processing the data, and still have no magic recipe how to tax that;
Pillar 1 is the most likely solution with taxing consumption markets – as the market of the final customers is something companies cannot shift;
Pillar 1 vs digital services tax (or significant economic presence);
AI will replace the lower value jobs;
ESG – the US vs. Europe;
Currently about 60% of carbon emissions are not priced at all;
Taxation of carbon is regressive, so it is politically very difficult to implement;
But CBAM and other initiatives sets Europe as an example for the others;
US with subsidies will hurt the rest of the world as many move to the US;
Pascal also explained why there is no global solution on this – countries are not ready, although it’s an important issue; there is an emergency, but it’s not addressed like that, but it will come.
A look into the future, 5-10 years from now on;
PIT, VAT and tax collection might be 3 big issues for OECD to resolve;
With Pillar 1 & 2 tax administrations will get more information and money and will be able to relax and be more friendly to businesses;
There are unprecedented inequality in the world; taxes will try to make it right, mainly with taxes on capital – inheritance taxes (Pascal doesn’t believe in wealth tax) and on capital income – dividends and capital gains;
Brasil who is in charge of G20 as of December will put tackling inequality high in their agenda; there might be a push towards addressing those issues at the UN as well;
VAT is a tax that works pretty well; digitalization is the best way to fight the grey economy;
AI should be the best help to the tax authorities with collection;
For in-house professionals one way to reduce the anxiety caused by all the changes might be to learn more about tax policy – to understand better how the rule was built and where it is heading;
tax issues at some point will move to the board rooms and will be a part of the policy conversation, especially with ESG topics; tax experts thus will handle much more than just compliance;
Insights for future leaders – thinking out of box might be the receipt.
About 9-10k companies within the Pillar 2 threshold of EUR 750 mil. represent around 85% of all the profits made globally.
Besides, Subject to tax rules of Pillar 2 do not have a minimum threshold – it is imposing 9% on all businesses, including the out-of-scope; that’s why countries like UAE and Barbados are imposing 9% CIT;
Regarding countries or tax administrations as examplesfor others:
tax administrations are reluctant to be benchmarked, but some data can be found in the FTA report;
regarding tax systems countries first need to look – what does it finance (what’s the level of satisfaction of people with the public spending), and then examine if it’s compatible with the selected social model (Scandinavia vs. US, etc); then a selection can be made between regressive VAT and progressive income taxes.
France, for example, that is obsessed with equality issues has more progressive taxes, is collecting about 47% of GDP in taxes and still not satisfied with its system.
