BUSINESS

Regional minimum tax. On May 2 and 3, the academic forum “Towards an inclusive, sustainable and equitable global taxation”, promoted by the Ministry of Finance and the National Tax and Customs Directorate (DIAN in Spanish) of Colombia, was held. The meeting served as a kick-off to a series of discussions in Latin America to explore a possible regional tax agreement with a view to imposing a minimum income tax equal in each country of the region. Although there are no concrete details, it would apply to large multinational corporations that earn profits in each country but whose operations are not established in each territory. The agreement seeks to deepen the provisions of the agreements of the Organization for Economic Cooperation and Development (OECD) on “Tax Base Erosion and Profit Shifting”. Colombia, as the main promoter of the agreement, aims to promote a joint regional declaration on the subject at a future event to be held on July 27 and 28. 

The conference consisted of an academic event that served as a first approach to the problem of taxation of these large corporations. In the panel on “Tax incentives and equality between countries”, Nathalie Beghin, from the Latin American Network for Economic and Social Justice, commented that the countries of the region should work on legal frameworks that regulate how tax expenditures should be created, managed and evaluated. Likewise, Ciro Meza from Baker and McKenzie mentioned that it is necessary to work on pre-agreed measures regarding legal certainty and double taxation relief. 

At the end of the event, the Colombian Ministry of Finance announced that the results obtained during the seminar will be used to prepare a public policy note with a list of all the issues analyzed during all the panels. This summary will be sent to all Latin American ministries and will be shared with the private sector and civil society as a mechanism to socialize regional concerns and use it as a starting point to work on concrete proposals on the subject.

Next steps

On July 27 and 28, the Cartagena Summit will take place, where the ministers of the region hope to deepen the issues discussed in the aforementioned forum. Colombia was optimistic about being able to move forward with sufficient agreements to sign a concrete agreement on the matter, but for the moment this possibility has lost momentum due to the recent political changes in Gustavo Petro’s government. As a result, the Minister of Finance, José Antonio Ocampo, the main promoter of the issue, left his post, which has taken away important support for the issue.