US Treasury proposes global minimum tax rate of 15%

Washington, May 21 (SocialNews.XYZ) The US Treasury Department said it proposed that the global minimum tax rate should be at least 15 per cent, noting that the final rate could go even higher.

In a statement on Thursday, the Department said over the last two days, department officials participated in meetings with the Steering Group of the Inclusive Framework on base erosion and profit shifting, as part of the Organization for Economic Cooperation and Development (OECD)/G20 international tax negotiations, reports Xinhua news agency.

The negotiations came less than two months after President Joe Biden proposed a series of corporate tax changes that could raise roughly $2 trillion over 15 years to pay for infrastructure investments in eight years.

Biden's proposal would increase the US corporate income tax rate to 28 per cent, up from the current 21 per cent, attempting to partially reverse the tax cuts under the former Donald Trump administration.

It would also raise the global minimum tax on multinational corporations from 10.5 per cent to 21 per cent, in a bid to discourage offshoring and create incentives for investment in the US.

In the statement, the Treasury Department underscored that 15 per cent is a "floor" and that discussions should continue to be "ambitious" and push that rate higher.

"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.

"Treasury made clear that 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," it added.

Source: IANS