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U.S. Proposes 15 Percent Global Minimum Corporate Tax During OECD Negotiations

Ruth Singleton
Published Date:
May 21, 2021


A May 20 proposal by the Biden Administration to set a global minimum corporate tax of 15 percent has garnered a mostly positive response from European officials, according to Bloomberg. Representatives from the U.S. Treasury Department met with the economic leaders of 24 countries during recent international tax negotiations at the Organisation for Economic Co-operation and Development (OECD).

CBS News reported that the Treasury Department is taking the position that 15 percent is just the starting point, and that it will push for the rate to be higher.

Treasury Secretary Janet Yellen called for a global minimum corporate tax in a speech she gave on April 5. “We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” she said. “Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and spurs innovation, growth, and prosperity."

The Biden Administration is seeking to gain OECD consensus on a global minimum rate in advance of a push by congressional Democrats to increase U.S. corporate taxes. The White House has proposed a 28 percent domestic corporate rate, up from 21 percent, to help pay for the president’s longer-term economic programs.

German Finance Minister Olaf Scholz said of the 15 percent proposal, “This is really a big progress. We will really have the chance that in this summer this deal and agreement that we were working for so long can happen.”

Bloomberg noted that the tax rate is only one side of the story, and that a more difficult issue will be setting up a framework for how taxes will be levied. French Finance Minister Bruno Le Maire, elaborated on that issue, saying, “The key question is not the figure, even if we can live with 15 percent—it can be a good compromise between the expectations of all members of the OECD. The key question is to define a global framework for digital taxation and minimum taxation.”

Bloomberg reported that there remain other obstacles to a sweeping OECD agreement, notably a separate disagreement over the tax treatment of giant technology companies such as Facebook and Google, but it said that the the Biden Administration has helped to transform the OECD negotiations, which had been bogged down for years.

Despite the mostly positive reception by European officials, the tax proposal could still face opposition from some countries, including Ireland, that have set low tax rates as a strategy to lure corporations to their shores.

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