WASHINGTON (AP) – The U.S. Treasury Department announced Thursday that it supports a minimum global tax rate of 15% – below the 21% minimum it has attempted to impose on foreign profits of U.S.-based companies.
The offer comes because the Organization for Economic Co-operation and Development and the Group of 20 major economies are seeking an agreement on a minimum corporate tax rate. It is part of an effort to end what the Treasury Department calls the “race to the bottom” as countries compete to lower corporate tax rates and attract multinational corporations.
The OECD estimates that governments lose up to $ 240 billion annually to companies that move their profits between countries to lower their tax burdens.
Competition to lower corporate tax rates “has undermined the ability of the United States and other countries to increase the revenue needed for critical investments,” the Treasury Department said in a statement, adding that its proposal had been well received by other countries.
The Treasury Department stressed that the proposed 15% is a lower limit, saying that “the discussions should remain ambitious and increase this rate”.
To fund his $ 2.3 trillion public works plan, President Joe Biden has proposed raising the U.S. corporate rate from 21% to 28% and adding a minimum tax of 21% on overseas corporate profits to raise.
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