Finance ministers from the wealthy G7 democracies are expected to endorse Washington’s proposal for an ambitious global minimum corporate tax at their meeting in London later this week, a US Treasury official said on Wednesday.
The official said in an emailed statement that the Treasury expects the G7 meetings on Friday and Saturday to provide momentum to move global negotiations on corporate taxation towards a broader meeting of the country’s finances. G20 in July in Italy.
The US Treasury proposed a global minimum corporate tax of at least 15% in May in an attempt to stop a downward spiral in corporate tax rates and deter multinational companies from shifting profits to countries paradisiacal. Read more
The proposed minimum is lower than the Biden administration’s own proposals to increase the domestic corporate tax rate to 28% and impose a minimum 21% levy on overseas profits made by U.S. companies.
Assistant Treasury Secretary Wally Adeyemo told Reuters in late May that he expected strong support from G7 countries for the U.S. minimum tax proposal, adding that it would help build support for tax plans in the United States. Biden among US lawmakers. Read more
A number of other G7 officials have raised expectations for finance ministers’ meetings in London, the first face-to-face meetings for the group since the COVID-19 pandemic made them virtual last year.
German Finance Minister Olaf Scholz told Reuters in an interview that he expects the group to make “significant progress” on corporate tax issues, including the thornier issue of agree on how to tax large global digital service companies such as Facebook (FB.O), Amazon.com (AMZN.O), Google (GOOGL.O) Apple Inc (AAPL.O) and Microsoft ( MSFT.O). Read more .
A number of countries have imposed unilateral taxes on digital services targeting these companies, which have drawn threats of tariff retaliation from the United States. Read more
The United States has insisted that any tax regime for these companies does not discriminate against American companies and that all individual taxes on digital services be banned. Instead, he proposed targeting the 100 largest and most profitable companies to pay more taxes in the countries where they do business, regardless of their industry classification and business model.
UK Finance Minister Rishi Sunak also told Reuters on Wednesday that the US plan to target the top 100 companies could work, but insisted that big tech companies need to be part of that group and pay more. ‘taxes where they operate. Read more
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