https://www.youtube.com/watch?v=KAYGSTAG2HM
The conference titled “Challenges for Uruguay Posed by the Global Minimum Corporate Tax,” held in HyFlex® format, took place on Friday, November 19, 2021.
The event, organized by the Academic Coordination Office for the graduate programs in Accounting and Taxation at ORT’s School of Graduate Business Studies, took place in the context of the agreement reached by various countries around the world (including Uruguay) on July 1, 2021, to establish a global minimum tax on the income of multinational corporations.
Dr. Nicolás Gambetta—the university’s academic coordinator for graduate programs in Accounting and Taxation—said:
“Nearly 140 countries, representing more than 90% of total global economic output, have endorsed the proposal to establish a global minimum tax on multinational corporations. The new global tax, which will apply only to companies with annual revenues exceeding €750,000,000, would entail the implementation of a global minimum effective tax rate of 15% on multinational corporations, essentially through a supplementary tax on the parent company’s insufficiently taxed sales to subsidiaries in other countries.”
Speakers at the event included Amparo Mercader, MBA—a partner in the tax practice at PwC in Washington, D.C.—, Dr. Alberto Barreix—a tax consultant and former lead economist at the IDB responsible for policy reforms and public administration—and Cr. Félix Abadi, Postgraduate in Tax Law—co-founding partner of Rueda Abadi Pereira and SMS Uruguay and professor of Taxation at the Faculty of Administration and Social Sciences, ORT—and Dr. Gabriel Oddone—professor of Economics at Universidad ORT Uruguay, partner at CPA Ferrere, and researcher at Cinve—.
The biggest tax reform of the century
https://www.youtube.com/watch?v=AQ3FIgCg1zY
“The truth is that those of us who work in this field aren’t used to the headlines and the attention this issue is getting, but this—which has been called the ‘biggest tax reform of the century’—has plenty of reasons to be grabbing people’s attention; it’s truly an unprecedentedmoment, ”said Mercader.
The expert noted that the reform is based on two pillars. The first concerns the digital and knowledge economy; the second, the global minimum corporate tax . The latter is the one with the greatest impact on Uruguay.
“I think it’s clear that the impact will be immediate—it’s not as if there was nothing before and now there is. This is a transition, something that has been growing, but it will undoubtedly have an impact on Uruguay.”
On the subject of digital technology, he noted: "Uruguay is not well integrated into global supply chains because countries in the region (particularly Brazil and Argentina) are protectionist, but the digital revolution offers opportunities to tap into other markets."
Reasonable technical changes
https://www.youtube.com/watch?v=DugeYrxEVKw
“We’ve never collected this much revenue, and we’ve never had such a large deficit. This is due to the collapse of the international financial system and the effects of the pandemic. It’s important to understand where we stand. We’re in a chaotic fiscal environment, ”said Barreix.
Regarding the first pillar, the expert noted that “we are moving toward a unified tax system.”
Regarding the second pillar, he stated: “Several income tax regimes —at least five—will coexist within a single jurisdiction, increasing opportunities for tax arbitrage and raising compliance costs.”
Finally, he stated: “When you make technical changes, they are only sustainable if they are technologically feasible and if they are politically and economically—especially economically—reasonable.”
Uruguay
https://www.youtube.com/watch?v=_qD9vn6buRM&t
“We have a law, Law No. 19,535, which established a tax regime that deviates significantly from what would be a straightforward application of the source principle,” Abadi noted, adding: “In all these processes, Uruguay should aim to collect copyright royalties, because this is one of the areas where the rest of the world is taking advantage of us. “We were pioneers and moved to tax based on the place of consumption, which is not the traditional approach.”
In addition, the expert believes that the second pillar amounts to a “neutralization of tax exemptions.” This, he noted, is cause for concern: “I believe that in our country we have used and abused tax exemptionmechanisms.”
He pointed out that while there is “the glass half empty,” there is also “the glass half full,” and that Uruguay has options and opportunities regarding the “biggest tax reform of the century.” For example, regarding the first pillar, “reaping the benefits of tax collection from the market—that is, taxing those who sell us technology from abroad for consumption within the country—it seems obvious that we should move toward that solution.”
One of the most important items on the agenda
https://www.youtube.com/watch?v=B_Y0-UyrZfg
“I believe we are facing a period of profound global change —changes that are occurring at a dizzying pace, as a series of power balances are being redefined,” said Oddone. “We are in the midst of a trend that I wouldn’t call irreversible, but one that is very strong and powerful.”
“It’s a wave that Uruguay has to ride. There’s no way our country can ignore what’s happening or assume it’s irrelevant to us,” the expert added.
“This is likely to be one of the most important issues on the public policy agenda in the coming years,” he concluded.