Why Small Business Should Care about Global Minimum Tax

Why Small Business Should Care about Global Minimum Tax

Why Small Business Should Care about Global Minimum Tax

Changes in global tax structure will affect even small companies. Here's how to prepare

By LJ Suzuki @CFO_share

Getty Images

Many entrepreneurs shrug and say, " Global Minimum Tax is a big corporation problem. It doesn't apply to me." This is an overly simplistic view of a global economic issue and putting your head in the sand does your small business no favors. Global tax policy will impact different small businesses in different ways, and as a Fractional CFO I see a minimum tax as both a threat and opportunity. Will you be prepared to navigate the impact to your business?

What is the Global Minimum Tax?

You likely have read headlines such as, " Facebook, Google and Microsoft 'avoiding $3bn in tax in poorer nations.' " The idea of big corporations taking advantage of tax loopholes is not a new one, but the information age has created new international opportunities to dodge the taxman. One basic flavor of this is to move intellectual property - patents, trademarks, software, etc. - to a nation with low corporate taxes such as Ireland (12.5%) or Switzerland (8.5%.) A subsidiary corporation is formed there which then charges royalties to the