World

US Treasury Secretary Yellen to call for global minimum tax rate

  • The US commitment to a global minimum tax also could help jump-start negotiations between wealthy countries on taxing international corporations, according to tax experts.
  • We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom.
Published April 5, 2021

US Treasury Secretary Janet Yellen will call for a global minimum corporate tax rate in a speech on Monday in a bid to sell a key provision in President Joe Biden's tax and infrastructure spending plan, Axios reported on Monday.

The US commitment to a global minimum tax also could help jump-start negotiations between wealthy countries on taxing international corporations, according to tax experts.

"We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom," Yellen will say in her speech, according to an excerpt of her prepared remarks to the Chicago Council on Global Affairs cited by Axios.

A US Treasury spokeswoman declined comment on the Axios report. Yellen is due to speak at 11 a.m. EDT/1500 GMT.

Last week, the Biden administration announced that it would seek a global minimum tax as part of its proposal to raise the US corporate tax rate and end certain deductions to pay for infrastructure investments.

The plan will raise the corporate income tax rate after deductions to 28% from the current 21%. That's still well below the 35% prior to 2017, a rate in place since 1993.

The plan would also impose a global minimum tax of 21% on overseas income for US companies and eliminate certain loopholes that the administration says encourage companies to shift profits to tax haven countries.

Among these would be an exemption that allows US firms to pay zero tax on the first 10% of income from overseas investments. The administration says the plan will discourage the shifting of jobs overseas.

Yellen has said that she wants to pursue an international tax agreement through the Organization for Economic Cooperation and Development to set standards on international taxation, including for digital services.

Comments

Comments are closed.