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Yellen says Reuters will try to resolve concerns over tax treaty countries

© Reuters. U.S. Treasury Secretary Janet Yellen attended a meeting of G20 finance ministers and central bank governors in Venice, Italy, on July 9, 2021. G20 Italy / Document via REUTERS

VENICE, Italy (Reuters) – US Treasury Secretary Janet Yellen said on Saturday she would work to try to address the concerns of countries that have not signed a global corporate tax agreement, but added that it was not necessary for all nations to adopt it.

Speaking to reporters with German Finance Minister Olaf Scholz, Yellen believed he believed he was looking forward to the G20 summit in October, with some concerns from countries such as Ireland, Estonia and Hungary.

“We will try to do that, but I have to stress that it is not essential that all countries be on board,” he said.

“This agreement has some sort of enforcement mechanism in place to ensure that it is not capable of harming the countries that are affiliated with it, using tax havens that undermine the functioning of this global agreement.”

Asked how the deal will lead to a split U.S. Congress, Yellen said he is working with congressional tax writing committees in Congress on a budget resolution that will use budget “reconciliation” rules.

These rules would lead to a simple majority in the U.S. Senate, as Democrats will have a one-vote majority if all members of their party are aligned.

“I am very optimistic that the legislation will provide what we need for the United States to comply with Pillar 2,” Yellen said, referring to the Organization for Development and Cooperation (OECD) section that regulates minimums. tax.

The Biden administration has proposed raising the U.S. minimum tax on foreign intangible income to 21% and introducing a new minimum tax that would deny tax deductions to companies that pay taxes to countries that do not support the minimum tax.

Yellen said the OECD tax deal, agreed in principle by 131 countries and now approved by the G20 government, is good for all governments and would increase revenue by ending the “bottom race” with countries competing to reduce corporate tax rates.

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