The EU supports the US demand for a global minimum corporate tax, but the rate must be set by Reuters
© Reuters. FILE PHOTO: FILE PHOTO: Yellen holds a press conference in Washington
By Jan Strupczewski
BRUSSELS (Reuters) – The European Commission on Tuesday backed a call by US Treasury Secretary Janet Yellen for a global minimum corporate tax but said its tax rate should be set in talks at the Organization for Economic Co-operation and Development (OECD).
Yellen said Monday she was working with the G20 to agree a global minimum corporate tax rate to end a “thirty year race for corporate tax rates”.
The US plan calls for a corporate tax rate of at least 21%, along with the removal of income exemptions from countries that do not have minimum taxes to prevent the shift of jobs and profits overseas.
“We continue to work to ensure that all companies, including digital ones, pay their fair share of taxes where this is rightly due,” said European Commission spokesman Dan Ferrie at a press conference when he spoke to the US Suggestion was asked.
The OECD has long been working on a global two-pillar tax system that was originally primarily intended for digital giants like Google (NASDAQ :), Amazon (NASDAQ :), Facebook (NASDAQ 🙂 or Apple (NASDAQ :)) to support companies there to tax where they make profit even if they are not physically present there.
The second pillar of the OECD system is to set a global minimum tax rate that can apply to all companies, not just digital ones, so that governments don’t compete with each other and offer lower taxes to attract large multinational companies.
“We welcome the strong support of all G20 finance ministers for an agreement on both pillars of the OECD by July 2021,” said Ferrie.
“We hope that Minister Yellen’s announcements regarding the US position, the withdrawal of the proposal for a safe harbor regime and the demand for minimum corporate taxation this summer will give new impetus to an agreement on a consensus-based global solution “, he said.
When asked whether the EU would support the US-mentioned 21% rate, Ferrie declined to comment on the numbers. “We are working on a solution within the OECD,” he said.
An agreement between European countries may not be easy, as corporate tax rates in the 27-nation bloc vary widely from 9% in Hungary and 12.5% in Ireland to 32% in France or 31.5% in Portugal.
Attempts by the EU to standardize what businesses are taxed on instead of setting a common tax rate have stalled since 2011, as taxation is a jealously guarded prerogative of national parliaments and is often an integral part of a country’s economic model.
Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and forex prices are not provided by exchanges, but by market makers. As a result, prices may not be accurate and may differ from the actual market price. This means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading losses you may incur as a result of using this data.
Fusion Media or any person involved with Fusion Media assumes no liability for any loss or damage caused by reliance on the information contained on this website, such as data, offers, charts and buy / sell signals. Please inform yourself comprehensively about the risks and costs associated with trading in the financial markets. This is one of the riskiest forms of investment possible.