The deal aims to close these loopholes and prevent multinational corporations from exploiting lower tax rates in other countries….reports Asian Lite News
US Treasury Secretary Janet Yellen urged Senate approval of President Biden’s global minimum tax deal, emphasising its importance in curbing corporate tax evasion.
Despite support from 130 countries, the deal faces Senate hurdles. Yellen defended the deal before the Senate Finance Committee, highlighting its potential to end the “race to the bottom” in corporate taxation.
While the US corporate tax rate currently stands at 21%, exceeding the proposed 15% minimum, loopholes allow many large companies to minimize tax payments.
The deal aims to close these loopholes and prevent multinational corporations from exploiting lower tax rates in other countries.
owever, some senators, like Republican Mike Crapo, express reservations, citing concerns about potential discriminatory taxes against US companies.
The OECD estimates the global minimum tax could significantly reduce low-taxed profit and shifted profit, though the full impact may take time to materialize.
This tax initiative, part of the OECD’s broader efforts to address multinational enterprise taxation, seeks to ensure a fair and equitable global tax system.
Yellen’s testimony also included defense of the administration’s tax policy and advocacy for investing in social programs like the child tax credit and low-income housing tax credit.
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