You make a good point that even if the cartel works, it won't stop the ongoing trend of decreasing corporate tax rates so that in this worst case scenario, as a result of competition we'll have a global 15% corporate tax rate all around the world, which is way lower than what we have today (Brazil 34%, France, China, India & UK 25%, Japan 23%, US 21% and Germany 16%). Of course, that's the worst case scenario and as you said the project can fail, the cartel can explode, and there are loopholes.
"Of course, the thresholds will probably be lowered over time.": they don't even need to lower them, inflation will do the job! In 20 years, €750m might be the equivalent of €400m today.
Also: could companies just split before reaching the threshold? Example: company A has annual sales of €700m. They split in A1 (that only sells in a specific region, or that only sells some of the products) and A2, each of them with about €300m of annual sales. A1 and A2 can share the same name, they can be partners, etc. as long as they're independent. A could also just sell some of its assets to avoid reaching the threshold. It's extremely inefficient for society as a whole (like the French 50-employee threshold) but it would make Pillar 2 useless.
You make a good point that even if the cartel works, it won't stop the ongoing trend of decreasing corporate tax rates so that in this worst case scenario, as a result of competition we'll have a global 15% corporate tax rate all around the world, which is way lower than what we have today (Brazil 34%, France, China, India & UK 25%, Japan 23%, US 21% and Germany 16%). Of course, that's the worst case scenario and as you said the project can fail, the cartel can explode, and there are loopholes.
"Of course, the thresholds will probably be lowered over time.": they don't even need to lower them, inflation will do the job! In 20 years, €750m might be the equivalent of €400m today.
Also: could companies just split before reaching the threshold? Example: company A has annual sales of €700m. They split in A1 (that only sells in a specific region, or that only sells some of the products) and A2, each of them with about €300m of annual sales. A1 and A2 can share the same name, they can be partners, etc. as long as they're independent. A could also just sell some of its assets to avoid reaching the threshold. It's extremely inefficient for society as a whole (like the French 50-employee threshold) but it would make Pillar 2 useless.
Hey Antoine, you make a very good point about inflation lowering organically the threshold, I will add this to the article.
On the strategy you mention, I wouldn't be surprised if it were tried, in one variation or another :)