US Treasury Secretary, Janet Yellen, has urged G20 countries to agree a global minimum corporate tax rate.
In an address to the Chicago Council on Global Affairs, Yellen said: ‘We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom. Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity.’
Yellen’s calls sit alongside the US’s preferred international consensus-based approach to taxation of the digital economy, along the lines of the OECD’s two pillars, although agreement has yet to be reached on the detail.
According to German finance minister Olaf Scholz: ‘It is now realistic to expect that we will reach agreement this year on an international framework for a minimum tax rate for companies, alongside better taxation of the digital economy.’
The New York Times reports that the Biden administration proposes raising the US corporate tax rate from 21% to 28% (notably still some way below the pre-December 2017 35% rate) as part of efforts to raise revenues in the post-covid era. The administration’s proposals also include a 21% minimum tax on US companies’ foreign income.
Commenting on Secretary Yellen’s remarks, John Cullinane, CIOT Director of Public Policy said: ‘US Treasury Secretary Yellen’s call for a minimum level of tax to be imposed on multinationals neatly brings together one strand of the Biden administration’s domestic tax policy with one of the “pillars” of the current OECD proposals to reform international corporate tax. There is also a suggestion that the US may have issues in the future with countries that allow effective corporate tax rates to fall too low.’
The Financial Times reported scepticism among some tax lawyers over whether any global compromise would be effective in practice, ‘especially as any deal would need to get through the US Congress’.
The paper reports Dan Neidle, tax partner at Clifford Chance, as saying: ‘People mustn’t mistake Biden’s desire to get more tax from US corporates with a desire to let other countries get more tax from US corporates.’
US Treasury Secretary, Janet Yellen, has urged G20 countries to agree a global minimum corporate tax rate.
In an address to the Chicago Council on Global Affairs, Yellen said: ‘We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom. Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity.’
Yellen’s calls sit alongside the US’s preferred international consensus-based approach to taxation of the digital economy, along the lines of the OECD’s two pillars, although agreement has yet to be reached on the detail.
According to German finance minister Olaf Scholz: ‘It is now realistic to expect that we will reach agreement this year on an international framework for a minimum tax rate for companies, alongside better taxation of the digital economy.’
The New York Times reports that the Biden administration proposes raising the US corporate tax rate from 21% to 28% (notably still some way below the pre-December 2017 35% rate) as part of efforts to raise revenues in the post-covid era. The administration’s proposals also include a 21% minimum tax on US companies’ foreign income.
Commenting on Secretary Yellen’s remarks, John Cullinane, CIOT Director of Public Policy said: ‘US Treasury Secretary Yellen’s call for a minimum level of tax to be imposed on multinationals neatly brings together one strand of the Biden administration’s domestic tax policy with one of the “pillars” of the current OECD proposals to reform international corporate tax. There is also a suggestion that the US may have issues in the future with countries that allow effective corporate tax rates to fall too low.’
The Financial Times reported scepticism among some tax lawyers over whether any global compromise would be effective in practice, ‘especially as any deal would need to get through the US Congress’.
The paper reports Dan Neidle, tax partner at Clifford Chance, as saying: ‘People mustn’t mistake Biden’s desire to get more tax from US corporates with a desire to let other countries get more tax from US corporates.’
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