The U.S. offers new plans in global corporate tax negotiations

The Biden administration has proposed a new model for taxing multinational corporations, urging the world’s largest businesses to pay national governments tariffs on the basis of their sales in each country as part of a global minimum tariff agreement.

In documents sent to 135 countries on the international tax on the OECD in Paris and obtained by the Financial Times on Wednesday, the US Treasury has drawn up a plan that would apply to the global profits of the largest companies, including major US technology companies, regardless of their physical presence in the country.

The plan aims to raise negotiations in the OECD, an international body of rich countries, to promise a more stable international tax system that would stop the expansion of the national digital tax and break the tax evasion and profit-transfer mold. By many multinationals.

US waiver calls on White House to lift IMF and World Bank spring meeting U.S. corporate tax With about t 2.5tn over the next 15 years for more than 2tn in infrastructure, clean energy and manufacturing.

Nearly a decade later, part two of the OECD tax negotiations have broken down. The first pillar is designed to establish a new system for imposing the largest multinational tax, and the second pillar is designed to address the world’s lowest minimum tax rate, which the U.S. aims to see at 21 percent.

An OECD deal would allow Joe Biden’s administration to raise corporate taxes on U.S. companies without fear of being subject to other countries, as it would include the widely applied global minimum tax rate.

If the U.S. plan is adopted, other countries will be able to raise their revenue from large U.S. technology groups and other multinational corporations but pay little corporate tax.

Washington’s proposal reflects Biden’s broader goal of describing Biden at the very bottom of global taxes, depriving the government of the money it needs to provide basic services and investment.

The OECD has been discussing international taxes for years because the United States has objected to other countries’ attempts to reach discriminatory agreements against multinationals, especially major US technology companies.

The Trump administration insisted on a “safe port” provision that would create an obligation for volunteers from U.S. technology teams. Mr Biden has rejected the claim since taking office this year, but this week’s proposal offers a new solution.

The U.S. Treasury is now offering a different formula where the world’s largest and most profitable firms will be subject to the new rules regardless of their field based on their level of revenue and profit margins. This will probably include about 100 companies in the United States, including various technological groups and other very large multinationals.

The proposals have already been shared with the OECD, which is calling for negotiations and trying to bring countries together to outline a global agreement by the summer.

Pascal Saint-Amanes, head of the OECD’s tax administration, welcomed the US proposals. “It resumes talks and is very positive,” he said. “It’s a serious offer with a chance to succeed in both cases [international negotiations] And the U.S. Congress. Peace is more important than anything and it will be stable [international corporate tax] The coronavirus system in the next environment.

St. Aman’s added that the proposal was likely to generate as much revenue for other countries as the OECD’s own advice, and would allow the United States to increase the amount of money it seeks from its largest corporations.

Many international tax advocates say the OECD proposals have not given emerging economies enough growth or the power to raise adequate taxes. U.S. proposals do not significantly change this feature, although U.S. documents indicate that the U.S. is willing to be flexible in some details.

An agreement would help resolve transatlantic trade disputes between the United States and several countries that have implemented digital service tariffs instead of broader multilateral agreements.

The United States has threatened to impose tariffs on other companies, including France, the United Kingdom, Italy and Spain, for unfairly discriminating against US technology companies for demanding digital taxes.

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