Implementation of GloBE Rules in Canada
Global Anti-Base Erosion rules, commonly referred to as GloBE rules, have recently been accepted and implemented in Canada. This rule is all about the international tax system which aims to levy minimum taxes from the multinational companies operating in multiple jurisdictions. In short, corporate houses so far had to pay taxes for each jurisdiction where they operate.
GloBE rules ensure that the MNCs pay the lowest possible amount. The policy was released on 20th December, 2021 as a part of a two-pillar solution to mitigate tax-related issues of the digitalized economy. The rules were approved by 137 member jurisdictions in October 2021 and are set to be implemented from 2022 onwards. As a part of this campaign, the Canadian government has also implemented the new GLoBE rules which will come to effect from January 2022.
To know the intricacies of the new rules and avoid any unwanted consequences due to slight misunderstandings, get in touch with the Corporate Tax consultants in Toronto at the earliest. Now, let us see the nitty-gritty of the GLoBE rules.
GLoBE Rules and Expats
Firstly, as per the rules, the minimum Effective Tax Rate (ETR) has become 15% per jurisdiction. This implies MNCs should pay at least 15% ETR which is a significant jump compared to the previous rates. However, this would incur USD 150 billion additional tax revenue each year. Now smaller businesses must feel the heat, right?
Here comes relief from the two-pillar system. Companies that have combined revenues of over EUR 750 million in two out of the last four years fall under the GLoBE rules. Therefore, it is a respite for smaller enterprises that have a foreign presence.
Expats will be relieved to know that the ETR will be revised in case of one or more jurisdiction(s) of operation fall(s) in the developing countries. Considering the costs related to transport, manpower, and other aspects, GLoBE has taken a lenient stance for business in developing countries.
To stay informed about the revised percentages, get in touch with the international tax consultants in Toronto today. International tax consultancy service in Toronto has a thorough knowledge of the newly adopted GLoBE rules and can save the ex-pats from dire consequences.
Although the GLoBE rules are applicable for the MNCs operating on foreign soil, individual ex-pats should also be well-informed about the new rules. Personal Tax consultancy service in Toronto is the ideal solution for individual ex-pats to know more about GLoBE rules.
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