15% Global Corporate Tax “Very Significant Advances”: OECD Official

A senior official at the Organization for Economic Co-operation and Development (OECD), who hosts a lecture on global corporate tax promoted by the Biden administration, said that a minimum tax rate of 15% is a “very important step forward” and many countries remain. Enough to compete to attract national companies to their jurisdiction.

Matthias Coleman, OECD Secretary-General, said: Interview with Bloomberg This followed a groundbreaking tax agreement on Saturday between senior Group of Seven (G7) officials, including the United States. The G7 countries have agreed to set the minimum global corporate tax rate applicable to foreign interests to at least 15%.

“It’s important to have the right balance,” Corman told Bloomberg. “I think it’s a very important step forward if every multinational company operating globally can achieve a situation where it is required to pay at least 15% of its profits.” “Appropriate competition” There is still plenty of room left.

In May, the US Treasury said it would promote a global corporate tax rate of 15% as a “foundation”. “The debate remains ambitious and the tax rate should be raised.”

Treasury Secretary Janet Yellen proposed a 21% minimum global corporate tax rate for US multinationals in April as part of President Joe Biden’s $ 2.2 trillion infrastructure investment proposal.

In a statement, the Treasury said in a statement when it demanded a minimum tax of 15% from companies: The ability of countries to increase the revenue needed to make significant investments. “

According to an analysis conducted by Bloomberg Economics in May, the median tax rates of the top 50 companies in the world dropped from 35.5% in 1990 to 17.4% last year. Both tech giants Facebook and Amazon fell below that in 2020, at 12.2% and 11.8%, respectively.

Janet Yellen
US Treasury Secretary Janet Yellen speaks at a press conference after attending the G7 Treasury Ministers’ Meeting at Winfield House in London, England, June 5, 2021. (Justin Tallis / Pool via Reuters)

France and Germany supported 21%, but other countries claimed a lower rate as previous OECD discussions on this issue centered on the same rate of 12.5% ‚Äč‚Äčimposed by Ireland.

The Biden administration’s efforts to adopt a global corporate tax rate at least partially counteract the potential disadvantages of the president’s proposal to raise the US corporate tax rate to 28%, which Republicans and business groups have blamed. It is an attempt to slow down wage increases, undermining the competitiveness of US companies.

The G7 Agreement sets the stage for discussions by a broader group of 20 countries (G20) in July, followed by discussions among approximately 140 countries under the auspices of the OECD. Even if an agreement is reached at that level, each country must enact legislation to implement it.

Some economists are skeptical that the Biden administration will impose global minimum tax rates on businesses, not only “frustrating” the free market, but also facing backlash from lawmakers from various countries. It states that it will be.

“After all, international agreements are essentially powerless because of the existence of national sovereignty,” Gigi Foster, a professor of economics at the University of New South Wales (NSW), told the Epoch Times.

“No matter how strong the international pressure is on countries to comply with some specified standard, the incentives for individual countries to offer attractive tax systems remain the same,” she added. ..

Daniel Ten and Reuters contributed to this report.

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