WASHINGTON, June 11. (Reuters) – G7 leaders in the UK will endorse US President Joe Biden’s proposal for a minimum global corporate tax of at least 15%, White House national security adviser Jake Sullivan said Friday on Twitter.
The US Treasury proposed a minimum global corporate tax of at least 15% in May to try to end the downward spiral of corporate tax rates.
“America is bringing the world together so that the big multinationals pay their fair share so we can invest in our middle class at home,” Sullivan tweeted.
By supporting this move, large countries are looking to keep multinationals from transferring profits – and tax revenues – to low-tax countries no matter where they sell.
Current global tax rules date back to the 1920s and are battling multinational tech giants that sell services remotely and attribute most of their profits to intellectual property in low tax jurisdictions.
According to industry lobbyists, US tech giants such as Facebook and Amazon could benefit from an agreement to create a global minimum corporate tax rate of 15% if the increasingly popular digital services taxes were also eliminated in the final deal. https://reut.rs/359z1u1
The decision was expected after G7 finance officials supported a tax rate of at least 15% during a June 5 meeting. The US Treasury said the G7 endorsement would give impetus to negotiations for a broader G20 financial meeting in July in Italy.
US Treasury Secretary Janet Yellen and her colleagues from Germany, Indonesia, Mexico and South Africa supported the move in a column published Wednesday in the Washington Post. They said they were confident that the global minimum tax rate could eventually be raised above 15%, citing “ambition of discussions so far.” (Report by Nandita Bose and Andrea Shalal; additional report by Eric Beach; editing by Mohammad Zargam and Alistair Bell)