US Assistant Secretary of the Treasury Wally Adeyemo has said he anticipates strong support from industrial democracies in the G7 for the Biden administration’s proposal for a global minimum corporate tax of 15% higher, which in turn should help solidify US Congressional support for national corporate tax law.
“I have a feeling that you are going to see great unified support within the G7 to move forward,” Adeyemo told Reuters on Monday after favorable comments on the Treasury proposal of France, Germany, from Italy and Japan. Read more
That support could be expressed at a face-to-face meeting of G7 finance ministers in London on June 4-5, Adeyemo said.
The reaction of the British president of the G7 has been more cautious. Read more
Last week, the Treasury launched a global minimum rate of 15% or more, well below the Biden administration’s 21% minimum rate for overseas income of U.S. businesses and its national tax rate. of companies proposed by 28%. Read more
In 2017, the Trump administration and Republicans in Congress reduced the rate to 21% in 2017 and instituted a minimum tax rate on foreign income from intangible sources of 10.5%.
The United States’ global minimum tax proposal is expected to be a key topic of discussion at a preliminary virtual meeting of G7 financial leaders on Friday.
Adeyemo, who is involved in the OECD tax negotiations, said he expects a broad international commitment of 15% or more to help build congressional support for a tax increase on corporations in the United States by reducing the spread between American and foreign rates. Once a higher US minimum is in place, it will prompt other countries to move closer to the US rate, he added.
“If we can get the world to say they’re ready to make at least 15%, that gives us the opportunity to get back to the international conversation once we’re done with the domestic part. “
OECD tax negotiators are aiming for a tentative deal this summer. By the time the G20 financial leaders meet in Venice, Italy in July, there should be a good sense of unity around a global minimum tax structure, Adeyemo said. He added that there would be a lot of technical details to work out, so a final deal may have to wait until G20 leaders meet in Rome at the end of October.
(This story is renewed to add the word “the” in quotes in the 9th paragraph)
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