U.S. Treasury Backs Off 21% International Minimal Company Tax Charge, Needs at Least 15%


By David Lawder

The division mentioned the proposal was made throughout a Group for Financial Cooperation and Growth (OECD) tax steering group assembly on base erosion and revenue shifting.

“Treasury proposed to the steering group that the worldwide minimal tax fee ought to be a minimum of 15%,” the division mentioned in a press release. “Treasury underscored that 15% is a flooring and that discussions ought to proceed to be formidable and push that fee greater.”

U.S. Treasury Secretary Janet Yellen first proposed a 21% world company minimal tax in April as a part of President Joe Biden’s $2.2 trillion infrastructure spending proposal, which might be financed largely by growing the U.S. company tax fee to twenty-eight% from the present 21%.

Some international locations, notably France and Germany, backed the U.S. proposal for a minimal fee as excessive as 21%, however different international locations considered that degree as too excessive.

Earlier OECD minimal tax discussions had centered round 12.5% – the identical fee charged by Eire.

The Treasury Division mentioned officers from its Workplace of Tax Coverage had been “heartened by the optimistic reception to its proposals and the unprecedented progress being made in the direction of establishing a world minimal tax.”

It proposed the worldwide minimal tax as a technique to reduce the impression of a better U.S. tax fee on the competitiveness of American firms and deter them from shifting operations or earnings to lower-tax jurisdictions.

Yellen had mentioned she wished to cease a “30-year race to the underside on company tax charges” at a time when governments have spent trillions of {dollars} on COVID-19 aid measures.

The Treasury Division mentioned it made clear on the OECD assembly {that a} world minimal tax fee “would guarantee the worldwide economic system thrives based mostly on a extra degree enjoying subject.”

(Reporting by David Lawder and Tim Ahmann; Modifying by Leslie Adler and Will Dunham)

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