Global Tax Updates: US, Switzerland and Bahrain Introduces 15% Minimum Tax
CA Gaurav Garg
Chairman, NIRC of ICAI [2023-24] I Transfer Pricing I NR Taxation I Income Tax I Chartered Accountant I Speaker
US Proposes Regulations on Corporate Alternative Minimum Tax
Earlier this month, the Internal Revenue Services of United States issued Proposed Regulations on the corporate alternative minimum tax (CAMT), which imposes a 15% minimum tax on large corporations' adjusted financial statement income (AFSI) starting from taxable years beginning on or after January 1, 2023.
A large corporation is defined as one with an average AFSI of $1 billion over three years, including foreign-parented groups with $100 million in U.S. AFSI. The proposed regulations offer guidance on how to determine if a corporation is subject to the corporate AMT, including specific rules for foreign-parented multinational groups and the calculation of the corporate AMT foreign tax credit.
Switzerland Introduces 15% Global Minimum Tax via Income Inclusion Rule Starting January 2025
On 4 Sept 2024, the Federal Council of Swiss Government decided to implement the income inclusion rule (IIR) starting 1 January 2025. This tax complements the Swiss supplementary tax i.e. Qualifying Domestic Minimum Top-Up Tax (QDMTT) introduced in 2024. Both taxes support the OECD/G20 minimum tax initiative. The IIR will impose a 15% tax on profits from foreign subsidiaries of Swiss corporate groups with global revenues over EUR 750 million.
The IIR is expected to generate between CHF 500 million and CHF 1 billion in revenue, benefiting both the Confederation and the cantons.
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Further, the Federal Council has also decided that for now, Switzerland will not adopt the Undertaxed Profit Rules due to legal risks and uncertain revenue potential.
Bahrain Introduces 15% Domestic Minimum Top Up Tax
On 1 Sept 2024, Bahrain issued the Decree Law (11) ( English Version ) of 2024 to implement a 15% domestic minimum top-up tax (DMTT) on large multinational corporations with global revenues over €750 million for at least two of the last four fiscal years starting January 2025. This move aligns with global tax reforms and applies to profits generated within Bahrain.
#BEPS #US #Switzerland #Bahrain #gauravgarg
Practicing Chartered Accountant, Deals in Direct & Indirect Taxation , International Taxation , Corporate Compliance and Tax Consulting
2 个月Sir it's a global tax ... So for those countries who are not introduced yet...how they deal with it. I mean other than the above counties
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2 个月Very helpful