The United States proposes a global minimum tax of 15%
Washington downsizes the proposed 21% levy on the revenues of multinationals that has not found agreement with all countries. Negotiations will continue with the G20 in Venice
Janet Yellen (photo: Federal reserve) The global minimum tax on multinational revenues could be 15%: it is the new quota proposed by the US Treasury Department, which they would thus accept a significant reduction from the 21% initially submitted to the 140 countries of the Organization for Economic Cooperation and Development (OECD). The idea was illustrated during a meeting of the OECD group on the erosion of the tax base and the transfer of profits and testifies to the difficulty of the negotiations between the parties. The dicastery headed by Janet Yellen however stressed that 15% is "a base and that discussions should continue to be ambitious and push the quota higher".The global minimun corporate tax would be one of the sources of financing for the infrastructure plan of President Joe Biden, which intends to increase the domestic tax on corporate revenues from 21 to 28% in parallel. A levy similar to the IRES that former President Trump had significantly cut from the previous 35%, with the aim also of keeping companies fleeing towards advantageous taxation on American soil. In addition, however, the Republican president introduced a new minimum tax of 10.5% in the United States, the Global intangible low taxed income (Gilti) tax, aimed at capturing the turnover shifted by domestic companies into tax havens, along with incentives to the repatriation of offshore capital.
Now, the Biden plan would like to raise the Gilti tax from 10.5% to 21%, making it a basis for discussions in the OECD regarding the global minimum tax on multinationals. Nations that believe they can make money by intercepting the revenues of companies in lucrative markets have come out in favor, such as France and Germany. Others, which have built fortunes by hosting the headquarters of large companies such as big tech, focus on more moderate percentages, such as the 12.5% practiced by Ireland. The Brits have also expressed concerns that 21% may prove too high in the long term, although the UK plans to raise the corporate tax to 25% by 2023.
Yellen urges d ' on the other hand, the international community to put an end "to 30 years of race to the bottom on corporate taxes", arguing that this competition has eroded the revenues of governments, especially at a time when they have spent trillions (both in dollars and in euro) for the support measures against the economic and health crisis caused by Covid-19, creating record levels of debt.
According to OECD calculations, the minimum global tax should make it possible to redistribute about 100 billion dollars to the year between governments. It will be discussed again on June 4-5 among the finance ministers in the group of Seven, while the G20 discussions will be held on July 9-10 in Venice. The agreement should be concluded by October.
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