Joe Biden maintains UK support for the lowest global business tax

Britain’s Shi Sunak is backing Joe Biden’s plan for a minimum business tax rate of 21 percent, as Britain pressures the United States to ensure that any agreement on tax giants includes a set of rules.

The chancellor, who presides over the G7 finance minister, said he would consider the global minimum tariff only as part of a broader package, with Treasury officials fearing that Biden would force technical firms to pay taxes “when the UK should pay.” .

Sunak has come under pressure from Labor for approval US plans for 21 percent World’s lowest corporation tax rate. Shadow foreign editor Lisa Nandi complained that Britain was hesitant, not led.

But the chancellor’s aides argued that support for Biden’s plan would go to Washington, which wants a preliminary agreement on a global minimum tax rate, as the US president also wants. Increasing the rate of domestic corporation tax 25-28 percent.

British officials feared that the United States would not agree to accept enough radicals Abolition of global tax rules – which is older than the 1920s – to reflect where multinationals sell their products rather than where groups have a physical presence.

The UK was also concerned that even if the Biden administration ratified the global agreement, it could still happen Trivial in Congress, Leave the UK high and dry.

The OECD and the G20 are discussing revising global taxes, and this should be confirmed at a meeting of G finance ministers in London on June 4.

Speaking at an online conference at Oxford University’s Center for Business Center, Mike Williams, director of business and international taxes at the Treasury, said a deal that only looks at global minimum taxes is not politically acceptable.

“The UK’s key proposal is that we can solve the digital tax problem, which we have been working on for years,” he said.

Britain has launched Sell ​​your own digital tax, Which is expected to raise about 500 500 million annually from major U.S. technology companies by 2024-55.

“It’s basically not about the minimum tax,” Williams said. “Minimum taxes can help ensure that businesses pay taxes as long as they work, but where taxes are paid is also important.”

“In the case of school supplies for Coventry’s children, when more taxes should be paid in the UK in California, paying more is actually not very helpful,” he added.

But Britain is ready to make a deal that includes Both pillars of Biden’s plan To impose a global tax: the global digital tax and the lowest global tax rate for multinationals.

The Chancellor told the Wall Street Journal CEO at the summit last week that the digital tax was a UK priority: “It’s about finding a way to pay taxes to larger international digital companies fairly and equitably.” He has promised to cut Britain’s digital sales tax if he agrees to a multinational deal.

Sunak added that the minimum corporate tax rate of 21 percent was “higher than previously discussed,” but that he was open to discussion. Ireland, heading 12.5 per cent, is fiercely opposed; Sunak has the set Increase UK rates At 25 percent in 2023.

Nandi said the Biden initiative on the lowest global tax rate represents a historic opportunity. He is working with Shadow Chancellor Rachel Reeves to push Sunak to put him on the agenda for next month’s G7 summit in Cornwall. “We have to run down,” he said.

Robert Palmer, director of Campaign Group Tax Justice UK, called on Britain to support Biden’s plan, saying it was “not a good thing” for the current government. Avoid tax evasion.

Although the deal at the table is “not perfect”, the global minimum corporate tax rate of 21 percent would be a “game-changer” in preventing companies from paying “ultra-low” tariffs, he said.

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