HomeAMERICA130 nations agree to support U.S. proposal for global minimum tax on...

130 nations agree to support U.S. proposal for global minimum tax on corporations

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US Treasury Secretary Janet Yellen speaks during a news conference after attending the G7 Finance Ministers meeting at Winfield House in London, Britain, June 5, 2021.

Justin Tallis | Acesparks

WASHINGTON – Treasury Secretary Janet Yellen announced Thursday that a group of 130 countries have agreed a global minimum tax on corporations, part of a broader agreement to overhaul international tax rules.

If enacted broadly, the GMT would effectively end the practice of global corporations seeking low-tax jurisdictions such as Ireland and the British Virgin Islands, regardless of where their customers, operations and executives are located. and be located.

“For decades, the United States has competed in a self-defeating international tax competition, lowering our corporate tax rates only to see other countries respond less well. The result was a global race to the bottom: who owns its Can corporates lower the rate further and faster? No nation has won this race,” Yellen said in a statement on the agreement.

“Today’s agreement by 130 countries representing more than 90 percent of global GDP is a clear sign: the race to the bottom is one step closer to an end,” Yellen said.

deal too Allegedly Includes a framework to eliminate digital services taxes, which targeted the largest US tech companies.

In their place, officials agreed on a new tax plan that would link to the places where multinationals are actually doing business, not where they are headquartered.

Much of the foundation has already been laid for the adoption of GMT by the Organization for Economic Co-operation and Development, which Template released last fall Outline of a two-pillar approach to international taxation.

OECD Inclusive Framework on Base Erosion and Benefit Transfer, Known as BEPS, is the product of negotiations with 137 member states and jurisdictions.

Yellen’s announcement did not include the actual rate at which GMT would be determined, but the Biden administration has pushed for at least 15%.

G-20 finance ministers and central bank governors are due to meet later this month in Venice, Italy, and international tax planning is expected to be high on the agenda.

The GMT agreement represents a significant part of what President Joe Biden called “a foreign policy for the middle class.”

The strategy, drafted by Biden’s national security adviser Jake Sullivan, emphasizes how foreign policy and domestic policy can be integrated into a new middle ground between traditional conservative and liberal views of global affairs.

“Foreign Policy for the Middle Class” aims to ensure that globalization, trade, human rights and military power are all used for the benefit of working Americans, not only for billionaires and multinational corporations, but for abstract ideological reasons. Not even.

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