Countries Could Raise $500BN a Year Under New Global Corporate Tax Rules

Countries could collect an extra $500 billion in corporate tax every year without raising a single tax rate, according to new research published as UN negotiators resume talks in New York.

The findings come from a joint study by global union federation Public Services International and the Tax Justice Network, released to coincide with the fifth round of negotiations on a UN tax convention.

The proposal would replace the century-old system that lets multinationals declare profits wherever they choose, often in low-tax jurisdictions, with a model that taxes them where they genuinely operate. Campaigners have dubbed it the shift from 'pay-where-you-say' to 'pay-where-you-play'.

Under current rules, multinational corporations can shift profits into tax havens on paper, even when they employ almost no staff and sell almost nothing there. The new approach would instead apportion a company's global profit to each country based on where it actually employs workers and where it makes sales.

The study finds that countries would collect 24 per cent more in corporate tax overall under this model, without any government raising its tax rate. High-income countries would gain the most in cash terms, taking in at least $140 billion more a year. Lower-middle income countries would roughly triple what they currently collect, while low-income countries would see their revenue rise fivefold.

Who Gains and Who Loses From the $500BN Tax Shift

Britain would collect 71 per cent more from multinationals, an extra £12.8 billion (approximately $16.5 billion) a year, according to the Tax Justice Network's findings. The United States would gain $35.5 billion more despite having withdrawn from the negotiations. India stands to collect $43 billion more, a 194 per cent increase, while Nigeria's take would jump 641 per cent, albeit from a low base of $2.5 billion.

For Britain, campaigners say the extra revenue would be enough to fund an NHS-style social care system by more than two-thirds.

Not every country benefits. A handful of jurisdictions that function as tax havens or have what researchers call an 'HQ bias' would collect less under the new formula, because they would no longer be able to tax profits booked there on paper rather than earned there in practice. The study argues these countries could offset the loss simply by raising their tax rates to levels closer to the global norm.

PSI General Secretary Daniel Bertossa said multinational corporations had been 'robbing countries of billions in corporate tax every year by running circles around a tax rule written before most households had electricity'. He added that tax havens and tax dodgers would be 'the only losers under this plan'.

The US Has Walked but the World Is Moving Anyway

Negotiators are meeting this week for what is expected to be the most consequential session yet, with most of the convention's text due to be finalised before a final vote scheduled for next year. The United States withdrew from the process last year, but no other government has followed its lead, and researchers say Washington cannot block other countries from adopting the new rules domestically.

Alison Schultz, a research fellow at the Tax Justice Network and one of the study's authors, said the findings show 'almost every country benefiting' because multinationals have been moving profits into what she called accounting 'no-where' zones for decades. She argued the location where value is created 'matters' regardless of objections from the Trump administration.

If adopted, the shift would mark the biggest change to global corporate tax rules in a century. The shift would redirect hundreds of billions of dollars from tax havens toward the governments whose workers and customers actually generate the profits. A final vote on the convention is expected next year, meaning the coming months of negotiation will determine whether the changes take effect at all.