Connect with us

Hi, what are you looking for?

Texas Local News

130 countries back deals – NBC 5 Dallas-Fort Worth

Some 130 countries have agreed on a global minimum tax backed by President Joe Biden as part of a worldwide effort to keep multinational companies from dodging taxes by transferring their profits to countries with low rates.

The agreement announced Thursday is an attempt to address the challenges presented by a globalized and increasingly digital economy in which profits can move across borders and companies can earn profits online in places where they do not have taxable headquarters.

The deal requires a minimum global tax of at least 15%, a key component pushed by Biden as he seeks to raise more revenue for his infrastructure and clean energy plans. Technical details still need work and it would be at least 2023 before the agreement takes effect.

The agreement, announced by the Paris-based Organization for Economic Cooperation and Development, also provides for fiscal part of the profits of the largest global companies in countries where they do business online, but may have no presence physics.

French Finance Minister Bruno Le Maire called it “the most important international tax agreement of a century.”

France-led countries have already begun imposing unilateral digital taxes aimed at U.S. tech giants such as Amazon, Google and Facebook; under the contract, they would agree to remove these taxes, considered unfair trade practices by the US, in favor of the global approach.

The French tax on high technology pushed retaliatory tariffs under former U.S. President Donald Trump, and France welcomed pushing the Biden administration to reach a global deal.

“Online giants have to pay their fair share of taxes where they have activities,” he said. “There is no reason why a small or medium business should pay more taxes than an online giant simply because it’s physically present in the country where it carries out its activities.”

U.S. Treasury Secretary Janet Yellen called it a “historic day.”

“For decades, the United States has been involved in a self-defeating international tax competition, lowering our corporate tax rates only to watch foreigners lower theirs in response,” he said in a statement. “The result was a global race at the bottom: Who can lower their corporate rates further and faster?”

Yellen says the country’s lowest private rates of money for infrastructure, education and efforts to fight the pandemic.

Manal Corwin, a tax director at KPMG’s professional services firm and a former Treasury Department official, said the deal put together the “big pieces” of an overall agreement, although technical complexity remains to be worked out. He said what was approved was “pretty much the U.S. proposal,” noting that it was “hugely important” for the U.S. to get a commitment from other countries to remove unilateral digital taxes.

Under the deal, countries could tax companies ’foreign earnings up to 15% if they go untaxed to subsidiaries in other countries. That would remove the incentive to use accounting and legal schemes to shift profits to low-rate countries where they do little or no business, since profits should be paperwork at home anyway. These tax avoidance practices cost countries between $ 100 billion and $ 240 billion in lost revenue annually, according to the OECD.

Not all of the 139 countries that joined the talks signed on the deal. Ireland’s finance ministry said it had “strong support” for the approach used in the agreement, but could not agree to the 15% minimum. Finance Minister Paschal Donohoe said the country’s 12.5% ​​rate is a “fair rate.” Ireland said it would be “constructively engaged” in further discussions.

Signatories include Bermuda and the Cayman Islands, economists considered tax havens, and the great economic powers of China and India.

More discussions are expected at the G-20 finance ministers ’meeting in Venice next week, ahead of a final endorsement by their country’s full G-20 leaders summit in October. The proposal to tax companies where they have income but no physical presence would require countries to register for a multilateral convention, while the minimum corporate tax could be adopted by each country through national legislation on a voluntary basis.

Tax experts say the voluntary approach could work if adopted by countries where many multinationals have their headquarters, such as the United States and Europe, by making it clear to companies that even if they avoid taxes by moving profits to overseas subsidiaries, profits these will be paperwork. at home up to the minimum.

In the United States, Biden has proposed a minimum rate of 21% on overseas earnings of large U.S. companies to prevent them from shifting profits from tax havens. U.S. Tax Biden must first pass Congress, where the Democratic president has only a narrow majority.

Associated Press Writer Angela Charlton of Paris contributed to this report.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

San Francisco Local News

WASHINGTON (AP) – Former President Donald Trump has filed a lawsuit against three of the country’s largest technology companies, claiming that he and other...

San Francisco Local News

(CBS Baltimore) — Millions of Americans have relied on stimulus checks to boost their finances during COVID. The pandemic seems to be nearing its...


Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

San Francisco Local News

SANTA CRUZ (BCN / CBS SF) – A woman who died in a homicide last week in Santa Cruz has been involved in a...