The US Treasury proposes a general minimum corporate tax rate of 15% Business and Economic News

The Biden administration hopes the move will end competition to attract countries with low tax rates, which will end up eroding government coffers.

The US has proposed that countries agree to a global tax on companies with a minimum of 15% aimed at ending competition to attract companies through cheap rates in international negotiations, then eroding government revenue.

“It is essential to work unilaterally to end the pressures of corporate tax competition and the erosion of the corporate tax base,” the Treasury Department said in a statement on Thursday. “The Treasury has stressed that it is a 15% floor and that discussions should continue to be ambitious and increase that rate.”

The offer, made in talks this week, brings the U.S. position closer to a 12.5% ​​rate when it was discussed at the Organization for Economic Co-operation and Development before the US resumed negotiations after the presidential election of Joe Biden. The U.S. movement could have an additional push to reach an agreement in the summer, as has been the goal of the OECD.

Some lower-tax countries – Ireland, for example, with social rates of 12.5% ​​- were skeptical of the Biden administration’s proposed 21% of the revenue generated by US companies. UK officials are also concerned that the rate was too high in the long run – even as the UK wants to raise corporate taxes to 25% by 2023 to complete public finances after the pandemic.

The Biden administration is trying to influence OECD talks in other countries to agree on a rate that the US can have, so there is a smaller imbalance. The Treasury has prioritized the global minimum tax both in proposals to revise U.S. international tax rules and in OECD negotiations.

New framework

The U.S. released a framework for global system renewal in early April, effectively resuming talks with roughly 140 countries after the Trump administration withdrew from negotiations.

The U.S. proposal has also managed to ensure that the world’s 100 largest companies pay more in places where they actually do business. While the movement’s enforceability, conflict resolution, and economics could benefit the poorest, the broad initiative once again gives a boost to the process that sparked an almost commercial war during the days of former President Donald Trump.

Treasury Secretary Janet Yellen’s approach has given rise to a warmer reception by attracting the revenues of global companies working in winning markets among the countries that can earn the most savings banks in those countries. France was among those who supported the US movements. Other nations that make money by hosting multinationals have reservations.

In the domestic sector, Biden has proposed raising the corporate tax rate to 28% from 21%. The general idea has been examined by Republicans and many business groups, who say the U.S. would be more competitive, while senior moderate Democratic Sen. Joe Manchin has called for a smaller walk.

According to the OECD, the way tax rights are allocated can be redistributed by about $ 100,000 billion, while the minimum tax pillar, along with current U.S. rules, would increase global government revenue by $ 100,000 billion a year.