US Treasury backs global minimum corporate tax of at least 15%

[WASHINGTON] The US Treasury on Thursday called for the establishment of a global minimum corporate tax of at least 15 per cent in negotiations with the Organization for Economic Cooperation and Development and G-20.

"Treasury proposed... that that the global minimum tax rate should be at least 15 per cent. Treasury underscored that 15 per cent is a floor and that discussions should continue to be ambitious and push that rate higher," according to a statement from the department.

US President Joe Biden's administration in April backed working out an agreement with major economies on imposing a shared minimum corporate tax, aiming to end competition to offer corporations the lowest rate and the sapping of government revenues.

Washington's support came as Mr Biden proposed a massive US$2 trillion domestic infrastructure and jobs program financed in part by hiking corporate taxes.

The German and French finance ministers in a joint interview later that month said their countries would support a minimum tax rate of as high as 21 per cent. The European Parliament also passed a non-binding resolution in support of that rate.

The US Treasury said the 15 per cent rate came after two days of negotiations with a G-20 and OECD steering group during which "discussions on the global corporate minimum tax rate began in earnest."

"Treasury reiterated that with the global corporate minimum tax functionally set at zero today, there has been a race to the bottom on corporate taxes, undermining the United States' and other countries' ability to raise the revenue needed to make critical investments," the statement said.

AFP