The United States wants the highest possible global corporate tax rate.
The basics are in brief
- It’s about preventing tax competition and base erosion.
- The American initiative met with positive response in Germany and France.
The United States supports taxing corporations worldwide at a rate of at least 15 percent. In two days of negotiations with the Organization for Economic Cooperation and Development (OECD) and the G20 nations, the US Treasury Department proposed this tax rate as a minimum, as it announced in Washington on Thursday. Therefore, the goal of the ministry is to raise this tax rate as much as possible in negotiations.
In a speech in early April, US Treasury Secretary Janet Yellen demanded a minimum global tax rate for corporations, but at the time she did not give a specific tax rate. It said at the time that international cooperation was needed on the issue to prevent tax competition and tax base erosion.
The American initiative met with positive response in Germany and France. Federal Finance Minister Olaf Schultz (SPD) and his French colleague Bruno Le Maire, in an interview with the “Zeit” website in April, expressed their willingness to support a global minimum corporate tax rate of 21 percent. The Organization for Economic Cooperation and Development is promoting a tax rate of 21 percent.
Stop international competition “down”
The US Treasury has now reaffirmed that “downward” international competition must stop at corporate taxation. Low taxes undermine the ability of the United States and other countries to “generate the income necessary for large investments.”
US President Joe Biden wants to increase corporate taxes in his country in order to finance a $ 2 trillion (roughly € 1.65 trillion) infrastructure program. According to his plans, the tax rate will increase from the current 21 percent to 28 percent.
Plans to impose minimal taxes on corporations around the world have been around for a long time. This issue is also an important concern of the Federal Government in Berlin. The background for this is the tax evasion strategies of large companies that, for example, transfer profits mathematically to countries with lower tax rates.