US Treasury Secretary Janet Yellen has warned that recently agreed corporate tax reforms, which ensure large corporations in more countries pay taxes, may not be ready until next year.
Following a meeting of G20 finance leaders today in Venice, Yellen said the OECD’s reassignment of taxation rights was “a little slower” than a global minimum tax rate of 15 percent.
She said the measures may not be considered by US politicians until the spring of next year.
G20 finance chiefs and central bank governors have approved the deal, but questions remain about President Joe Biden’s ability to get the changes through Congress.
Yellen’s comments suggest that the reforms could be implemented in two stages, with the global minimum tax rate going first.
She said she hopes this year to include provisions to implement what is known as the Pillar 2 minimum tax in a budget “reconciliation” bill that Congress could pass by a simple majority, possibly without Republican support.
The second part of the agreement – called Pillar 1 – would allow large multinationals like Google and Facebook to tax in countries where they sell products and services, not just where they are headquartered.
An official from the Treasury Department warned that this would require a multilateral tax treaty that would take time to negotiate.
“Pillar 1 will be on a slightly slower path. We will work with Congress, ”said Yellen. “It could be ready in the spring of 2022 and we will then try to determine what is required to implement it.”