Corporate

US Treasury makes ‘unprecedented progress’ towards global corporate tax rate

The body announced that it was ‘heartened; by the positive feedback it received from the Steering Group regarding the 15% rate

The US Treasury has claimed to have made “unprecedented progress” towards the introduction of a 15% global corporate minimum tax rate.

The body announced that it was “heartened” by the positive feedback it received regarding the rate, which it said would bring an end to the “race to the bottom” on corporate taxes.

Led by Treasury secretary Janet Yellen, discussions were held on the 19 and 20 May between the Office of Tax Policy and the Steering Group of the Inclusion Framework on base erosion and profit shifting (BEPS).

The talks come as part of the Organization for Economic Cooperation and Development (OECD) and G20 international tax negotiations, with the US pushing that “the global playing field must be fair”.

With varying corporate tax rates across the globe, such as Ireland’s 12.5% rate, the Treasury claimed that the current level is “functionally set at zero today” as companies continually set bases in tax havens.

In a statement, the Treasury said: “It is imperative to work multilaterally to end the pressures of corporate tax competition and corporate tax base erosion.

“A global corporate minimum tax rate would ensure the global economy thrives based on a more level playing field in the taxation of multinational corporations, and would spur innovation, growth, and prosperity while improving fairness for middle class and working people.”

The 15% proposed to the Steering Group has been deemed a “floor”, as Yellen pushes for a more “ambitious” plan closer to a previously proposed 21%.

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