U.S. Treasury Proposes Global Minimum Corporate Tax of At Least 15%

The U.S. is asking other countries to agree to a 15% global minimum corporate tax, as part of international efforts to dissuade companies from seeking lower taxes outside of their home nations, Bloomberg News reported. “A global corporate minimum tax rate would ensure the global economy thrives based on a more level playing field in the taxation of multinational corporations,” the Treasury Department tweeted. “It would spur innovation, growth, & prosperity while improving fairness for middle class & working people.” The Organization for Economic Cooperation and Development had discussed a 12.5% rate before Joe Biden was elected president, and the proposed 15% rate is seen as increasing the chances a deal could be reached this summer. Biden had initially proposed a 21% rate for global income earned by U.S. companies, but some lower-tax companies balked at that. The U.S. aims to ensure that the world’s 100 largest companies pay more in taxes to the countries where they do business, restarting discussions that had been more volatile under former President Donald Trump, who ended up pulling out of negotiations. The OECD estimates that changing how taxing rights are allocated could redistribute about $100 billion and that establishing a global minimum tax could raise as much as $100 billion a year for governments worldwide.

Janet H. Cho

source:barrons.com