The Global Corporate Minimum Tax: A Cure or Not?

26 Pages Posted: 29 Mar 2023

See all articles by Jack Mintz

Jack Mintz

University of Calgary - The School of Public Policy; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 1, 2023


This paper examines how the corporate income tax base is to be shared with the proposed global corporate minimum tax, which has been agreed to by more than 130 countries. The aim of the global minimum tax is to reduce the incentive for profit shifting by putting a floor on corporate tax rates so that they do not fall below 15 percent of adjusted accounting profits. However, the global minimum tax itself will introduce new capital market inefficiencies. Foreign-owned capital can be taxed more heavily than domestic capital. The minimum tax distorts capital allocation by favouring labour-intensive projects over capital-intensive projects when the tax is paid. It also distorts the accounting decisions of corporations when they seek to avoid paying the tax. The corporate tax gains to Canada, net of personal tax revenue losses, are small, between $170 million and $645 million annually, depending on whether host countries adopt a top-up tax or not. After adjustments are made for economic losses, the annual net gain to the Canadian economy ranges from $95 million to $360 million, exclusive of administrative and compliance costs. Overall, it is not clear that the global minimum tax will work any better than other policies aimed at reducing corporate profit shifting.

Keywords: Corporate Income Tax, Corporate Minimum Tax, International Taxation, BEPS, Tax Competitiveness

Suggested Citation

Mintz, Jack, The Global Corporate Minimum Tax: A Cure or Not? (February 1, 2023). Canadian Tax Journal/Revue fiscale canadienne, Vol. 70 (supp.), 2022, pp. 231-55, Available at SSRN:

Jack Mintz (Contact Author)

University of Calgary - The School of Public Policy ( email )

Calgary, Alberta
403-220-7661 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679

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