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Yellen requires international minimal company tax charge in first main deal with as Treasury secretary

“We’re working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom. Together, we can use global minimum tax to make sure that the global economy thrives, based on a more level playing field in the taxation of multinational corporations and spurs innovation, growth and prosperity,” Yellen stated in a speech to the Chicago Council on Global Affairs.

“Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” she stated in the course of the remarks, which represented her first main deal with as Treasury secretary.

“It’s about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of financing government.”

President Joe Biden’s infrastructure proposal, referred to as the American Jobs Plan, would improve the minimal tax on US firms to 21% and calculate it on a country-by-country foundation to discourage firms from sheltering income in worldwide tax havens.

The plan would additionally elevate the company revenue tax charge to 28%, up from 21%. The charge had been as excessive as 35% earlier than former President Donald Trump and congressional Republicans lower taxes in 2017.

Yellen had beforehand referred to as for a world minimal company tax charge, together with throughout her affirmation course of earlier this 12 months, when she informed a Senate panel that if confirmed, she would work “with our allies on a global tax regime that protects American competitiveness while ensuring corporations pay their fair share.”
The challenge has been mentioned in recent times by members of the Organization for Economic Cooperation and Development, together with in 2019, when some finance ministers mentioned a possible plan that, amongst different issues, would be sure that multinational firms pay a minimal stage of tax, thereby discouraging them from shifting income to nations with decrease ranges of taxation. The plan, nevertheless, by no means got here to fruition.

This story has been up to date.

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