UK's Labour pushes for vote on US minimum corporation tax plan

[LONDON] Britain's main opposition Labour Party said it will push for a vote in parliament on Monday over support for US plans to introduce a global minimum corporation tax rate.

The US Treasury Department earlier this week said it would accept a floor of at least 15 per cent during international negotiations, a rate significantly below its proposed 21 per cent minimum for US multinational firms.

The Biden administration's proposed Global Intangible Low-Taxed Income tax (GILTI) rate of 21 per cent, aimed at capturing revenue shifted by companies to tax-haven countries, was widely viewed as a starting point for renewed OECD talks on a global minimum tax.

While France and Germany backed 21 per cent, other countries have pushed for a lower rate, as previous OECD discussions on the subject had centred around 12.5 per cent, the same rate charged by Ireland.

Britain will raise its main corporation tax rate to 25 per cent from 19% in 2023, finance minister Rishi Sunak announced earlier this year.

Labour is tabling an amendment to the Finance Bill.

"This global pact will bring in extra tax benefitting Britain, while stopping huge multinationals and online giants from undercutting our businesses," said Labour finance spokeswoman Rachel Reeves.

Britain's finance ministry has said reaching an international agreement on how large digital companies are taxed "is a priority" and that "we welcome the US' renewed commitment to tackling the issue and agree that minimum taxes might help to ensure businesses pay tax".

"However, it also matters where the tax is paid and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities."

REUTERS