LThe OECD, which has been negotiating for years, had a bad time with the crucial discussions on imposing a better tax on multinational companies around the world. Donald Trump had hit him hard. Janet Yellen, the new US President and Secretary of the Treasury, revived her. To finance his massive investment in energy conversion and infrastructure, Joe Biden wants to raise the federal corporate tax rate in the United States from 21 percent to 28 percent. At the same time, he promises to implement a 21% minimum tax regardless of the country where the American multinationals operate. In other words, if a country like Ireland imposes a 12.5% tax on Google’s profits, the United States will charge 8.5% more for Irish activity. What to do to stop the strategy of tax competition that reduces tax rates, including in the European Union!
Joe Biden’s proposal is even more significant because the OECD had a terrific plan to apply a minimum tax rate of 12.5% to end tax breaks. “This is a real international tax revolution, and we must measure it well,” said Bruno Le Meyer, the French finance and finance minister, who has been fighting for the deal since taking office. “Pillar 2” International Discussions. “In this column, we agree with the French and American positions. The question of rates remains, but the most important thing is principle, ”he assures us. Surprising the rate proposed by Joe Biden, the minister said, “France has no difficulty in considering a minimum tax rate of more than 12.5 per cent”, although it does clearly support a minimum tax rate of 21%.
ReadJoe Biden Gaffam blocked the tax
A blessing for Macron?
An agreement can be reached in the summer with the next meeting of the negotiating countries. hurry up. The German election in September, in particular, could not reach a compromise by the end of this year, and the mayor warns Bruno that it wants to resume it at the European level in the first half of 2022. EU. Opportunity to mark a major political victory in a subject that loves French and yellow dresses, just in time for the presidential election. At the instigation of the United States and the OECD, there will be a paradox of seeing tax coordination progress in Europe, thanks to a qualified majority decision instead of the required consensus.
But before we get there, we want to ensure that this minimum tax levied by multinational corporations, which can generate billions in tax revenue every year, will lead to better taxation for the digital giants, the “pillar 1” of the OECD debate. It should be a global agreement that includes the minimum tax and the tax on digital giants, the biggest beneficiaries of this financial crisis. The French minister warns that in the absence of an international agreement on the subject, it will impose its own national tax on digital operations based on sales achieved in France from 2019 onwards. “The American proposal seems to us to be an interesting start. This allows us to include more digital companies than planned in the OECD proposal, ”explains Bruno Le Meyer, who asked his services and the OECD to evaluate the technical aspects of the US proposal. We want to make sure that all the digital giants who have emerged victorious from this financial crisis are paying their fair share of taxes. France will maintain the national tax until the end of the agreement.
Despite the change in US stance, after Donald Trump’s blockade, the deal is still far from final. It is noteworthy that the Biden proposal must go through the code forks of Congress. That is a far cry from success. 21% rate, in particular, can be rejected …