21/05/21

US: Global minimum corporate tax rate should be 15 percent, according to Treasury.

As published on transferpricingnews.com, Friday 21 May, 2021.

The US Treasury has told the Steering Group of the OECD Inclusive Framework on BEPS that the global minimum tax rate should be at least 15 percent.

The OECD Inclusive Framework on BEPS brings together over 125 countries and jurisdictions to collaborate on the implementation of the BEPS recommendations. The Steering Group comprises Australia, Brazil, China, France, Germany, India, Italy, Japan, South Africa, the UK, and the US, among others.

During meetings held with the Steering Group, the US Treasury expressed its belief that “the international tax architecture must be stabilized, that the global playing field must be fair, and that we must create an environment in which countries work together to maintain our tax bases and ensure the global tax system is equitable.”

The Treasury said: “It is imperative to work multilaterally to end the pressures of corporate tax competition and corporate tax base erosion.”

The US Treasury reiterated that with the global corporate minimum tax functionally set at zero today, there has been a race to the bottom on corporate taxes, undermining the US’ and other countries’ ability to raise the revenue needed to make critical investments.

“A global corporate minimum tax rate would ensure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and would spur innovation, growth, and prosperity while improving fairness for middle class and working people,” the US Treasury told the Steering Group.

The US Treasury proposed to the Steering Group that the global minimum tax rate should be at least 15 percent. It underscored that 15 percent is a floor and that discussions should continue to be ambitious and push that rate higher.