If the global minimum tax rate of 15% were adopted, it would still leave a hole between that rate and the U.S. tax rate proposed by the Biden administration. Treasury officials argued that the brand new hole may be smaller than the current hole and would not subsequently decrease the competitiveness of US companies.
Nonetheless, part of the ability of the Biden administration to promote its plan depends on whether or not it is able to cope with other nations on the global minimum tax so that American businesses do not face an aggressive downside.
The finance ministers of France and Germany indicated last month that they were ready again at an overall minimum tax rate of 21%. But nations may have to change their legal guidelines for the settlement to formally occur, and enforcement of the agreement could be sophisticated. Ireland, which is not a member of the steering committee for negotiations through the Organization for Economic Co-operation and Development, has a corporate tax rate of 12.5% and has expressed reservations about a such regulation.
Treasury officials said they were not insisting on the 21% rate in any way. However, they consider the 15% degree to be a flooring material and may continue to push for a higher rate. They mentioned that they believed other countries had been receptive to adopting a higher rate depending on the fate of any changes to the US tax system that might be considered.
Treasury Secretary Janet L. Yellen has warned that a global “race to the bottom” has exhausted authorities’ revenues, and she or he has adopted a more collaborative negotiating strategy than that employed by the administration. Trump.