Deputy U.S Treasury Chief Awaits G7 Backing For 15%-plus Global Minimum Tax
U.S. Treasury Deputy Secretary Wally Adeyemo said on April 25, 2021, that he is seeking solid & prominent backing from G7 peers for Biden Administration’s proposed 15%- plus global minimum corporate tax, which should help thicken the support in the US Congress for domestic corporate tax legislation.
Mr. Adeyemo said after his backing statements about the Treasury’s proposal from France, Germany, Italy, and Japan, “My perception is that you are going to witness a lot of combined support amongst the G7 moving forward.”
The above-mentioned support may be declared at a face-to-face meeting of G7 finance ministers in London on June 4-5, as per Adeyemo.
The response from the G7 seat Britain has been more monitored. Earlier on May 4, 2021, foreign ministers from the G7 countries met in London for communication on the global economy and pushed for a unified approach with China.
Last week, the Treasury glided at a global minimum rate of 15% or higher, well-underneath the Biden administration’s 21% minimum rate for U.S. organizations’ foreign income and its 28% suggested domestic corporate tax rate.
In 2017, the Trump administration and Republicans in Congress decreased the rate to 21% and incorporated a minimum tax rate on foreign income from intangible sources of 10.5%.
The U.S. global minimum tax proposal is likely to be a vital subject of discussion at a preliminary virtual G7 finance pioneers meeting on Friday.
Recommended Read: G7 Requires China To Unlock The Global Economy
Adeyemo, who is engaged with the OECD tax talks, explained that he seeks a wide worldwide commitment of 15% or more to initiate support in Congress for a US corporate tax increase by reducing the gap between US and overseas rates. Once a higher U.S. minimum is set up, that will give motivation to different nations to push toward the U.S. rate, he added.
“If we could get the entire world ready to do a minimum of 15%, it will enable us to return to the international conversation once we have completed the domestic piece.”
Negotiators in the OECD tax talks have been concentrating on an agreement in principle this summer. By the time of a G20 finance pioneers meeting in Venice, Italy in July, there ought to be a good feeling of unity around a global minimum tax structure, says Adeyemo. He also added that there would be several technical issues to work on, so a final agreement may need to stand by until G20 pioneers meet in Rome toward the finish of October.