The game of where to put the profit and where to put the loss by big corporation with multiple companies registered around the world is the way effective taxes are lowered now. Apple has been doing that for years and the bigger the company the easier is to do it.
The easiest way to avoid paying this is to shift the profits to another "consulting", "licensing", "distribution" deal. You pay this company almost all your profit and put the expenses in your P&L. Now you need to pay the tax only to what you've chosen to pay. Even with GAAP standards there are ways to do it. The "transfer pricing" quagmire exists for a reason, it's almost impossible to claim that this/that "licensing" deal isn't priced properly.
It looks like this is a populist move to claim "we're taxing the rich", but it won't work as expected unless all the information from all the countries goes into 1 centralized place to be analysed. In Germany there is lot's of bad decisions and this is one of them. (like the one to shut down their reactors and burn coal instead).
Remember that companies are taxed on their surplus, not their income. So this means that these kinds of taxes are not a extra cost that is evenly distributed among all companies, companies with low or no surplus will pay little. Up-coming competitors (with low surplus) get an advantage, increasing competition.
If the companies could simply increase their prices 15% today without loosing to competition with others, they would already have done so.
By the way, the consumer only ends up paying the tax if the taxed corporate income is necessary for a future investment or production process. If the corporate income is paid out to owners and investors then the consumer carries none of the cost.
The point is that all countries should equalize their tax rates so that the differences between tax optimized international companies and unoptimized local companies shrinks.
The wealthiest 0.1% have negligible income; the middle class bears the brunt of taxation. All companies run on corporate welfare. They refuse to do anything without significant funding from Govt. Big 3 Auto got many bailouts, $250B in profits but don't have any money to build charging stations/network or invest in making an EV that people would like to buy. Big Telcos took 100s of billions for broadband access, which they never delivered. Oil companies get trillions in subsidies every year[2].
Middle class pays all the taxes, both direct and indirect. Indirect taxes are inflation, people's hard-earned-and-saved money loses 98% of value in a few decades, thanks to Govt printing massive amounts of money and giving it to Corporations (privatizing profits and socialize losses). And we also pay for substantially degraded quality of life from externalities, pollution (air pollution kills 10M/year [3]), PFAS, climate change, lead, etc.
And no, the top 1% is not wealthy, its the top 0.1% that matters. Media talks about the top 1%, these are usually people who worked their ass off sacrificing everything for 2+ decades to get to a decent income but, but thats temporary. Most of them are going to fall out of that income bracket, with layoffs, with burnout, the sacrifices made catch up to you, you either get physical or mental health issues.
[1] Profits at the “Big 3” auto companies—Ford, General Motors, and Stellantis— skyrocketed 92% from 2013 to 2022, totaling $250 billion. Forecasts for 2023 expect more than $32 billion in additional profits: https://www.epi.org/blog/uaw-automakers-negotiations/
[2] https://www.imf.org/en/Blogs/Articles/2023/08/24/fossil-fuel...
[3] https://www.nytimes.com/2022/07/08/opinion/environment/air-p...
Both can be balanced out by tieing things, not to arbit rates pulled out of someone's ass, but to land and energy use. The biggest users of the planets resources need to be taxed the most.
So it is impossible that the profit for owners/shareholders/etc. will sink instead of prices rising?
This is really just basic math. If your country isn't a larger percentage of their market than this would increase their global tax rate, staying in your country would cause them to lose money.
It's also not obvious how they would expect to enforce this, or prevent it from leading to restructuring. If a German company buys widgets from China for $9 and sells them for $10, 90% of the revenue is going to China, but the Chinese company has no operations in Germany. If that means the foreign company (and so 90% of the revenue) isn't subject to your jurisdiction, that's what everybody is going to do. If you try to collect the tax at the border, all you've done is switched to VAT and you might as well do it formally instead of doing something unnecessarily complicated but equivalent.
And it creates a new arbitrage opportunity where some country nominally taxes you at a particular rate but then you get the money back or some other equivalent value using whatever means causes it to not be considered taxable income.
Also, I'd still rather this than the policy of 'let the big corporations do whatever they want and don't pass laws they don't like'.
[0] https://www.pwc.com/us/en/services/tax/library/corporate-boo...
