Posted on 07/06/2021 7:06:12 PM PDT by SeekAndFind
Nine countries have refused to sign onto an international tax reform framework that includes a 15 percent global minimum corporate tax pushed by the Biden administration as a way to reduce international tax arbitrage by U.S. multinationals and blunt the impact of President Joe Biden’s proposed domestic corporate tax hike.
While officials from 130 out of 139 countries in the so-called OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting agreed last week to establish the new framework, Ireland, Estonia, Hungary, Peru, Barbados, Saint Vincent and the Grenadines, Sri Lanka, Nigeria, and Kenya did not sign the agreement.
Irish Finance Minister Paschal Donohoe, whose country has attracted many big U.S. tech firms with its 12.5 percent corporate tax rate, said he would not join the other signatories but would still try to find an outcome he could back.
“I was not in a position to join the consensus on the agreement and specifically a global minimum effective tax rate of ‘at least 15 percent’ today,” Donohoe said. “I have expressed Ireland’s reservation, but remain committed to the process and aim to find an outcome that Ireland can yet support.”
Mihaly Varga, the finance minister of Hungary, which has a 9 percent corporate tax rate, dismissed the 15 percent rate as “too high.”
“The global minimum tax would obstruct economic growth, the planned 15 percent tax rate is too high, and it shouldn’t be levied on real economic activity,” Varga said in a statement on Friday, though he added that Hungary would continue to negotiate.
The two-pillar framework—the outcome of negotiations coordinated by the Organisation for Economic Cooperation and Development (OECD) for much of the last decade—aims to force large Multinational Enterprises (MNEs) to pay tax where they operate and earn profits, while seeking to end a race to the bottom
(Excerpt) Read more at theepochtimes.com ...
Doesn’t this deal have to meet the approval of the US Congress for the USA to even officially pass it?
Only Congress has the power to tax here in the USA, not the executive branch.
The agreement as it stands would have no impact here in the U.S. The minimum corporate tax rate they set is 15%. The U.S. currently has a flat corporate tax rate of 21% which is the lowest it’s been in decades (at least) and isn’t going to be getting cut any time soon.
That pesky Constitution requires treaties (I.e. agreements with other nations) to be approved by a 2/3 vote of the US Senate. Of course in recent years presidents have several times made agreements without securing Senate approval. Neither Congress nor the Judicial branch has acted to stop these international agreements which violate the Constitution.
The agreement would not be legally binding without a treaty. And actually, it wouldn’t be legally binding even with a treaty because all bills for the raising of taxes must originate in the House. A treaty ratified by the Senate doesn’t meet that standard.
Well, it used to be that way.
Wish I could speak Estonian or Hungarian...
So long as the US continues to tax companies on overseas earnings, we’ll continue to see companies leaving.
Burger King left the US for Canada because under US tax law, Burger King restaurants in Germany were required to pay income tax to the US. Canada has no such requirements.
Roberts will deem it to be a "fine" ...
The countries smart enough to have the lowest corporate tax rate will have a lot of companies relocate, at least on paper.
Yes, it might actually be a win, except for the fact that a global tax has to include subsidies, which it won’t. I also am highly skeptical about any kind of global tax.
It is my understanding many corps pay virtually no tax. Tax write offs all over the place. Hire a deviant get a break. Ie take a subsidy via me an you.
Ireland is nice and so is Hungary. Fewer violent communists than this fraudulent totalitarian junta.
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