Business lobbyists and Republican lawmakers have warned that doing so will make U.S. companies less competitive than their international counterparts and generate more relocation.
Treasury Secretary Janet L. Yellen and other government officials have said getting other countries to be accompanied by a basic tax rate on profits abroad would minimize any disadvantage for northern companies. -American and would be less likely to move their operations to countries with lower taxes.
Ms Yellen described the deal as “significant” and “unprecedented”.
“This global minimum tax would end the race to the bottom in corporate taxation and ensure justice for the middle class and working people in the U.S. and around the world,” Ms. Yellen said in a statement. “The global minimum tax would also help the world economy prosper, by leveling the playing field for businesses and encouraging countries to compete on a positive basis, such as educating and training our workforces and investing in research and development and infrastructure “.
The group of 7 delegations, representing Britain, Canada, France, Germany, Italy, Japan and the United States, negotiated late Friday to outline details on the operation of the new tax systems and language in the statement.
France, which had been pushing for a tax rate of more than 15 per cent, wanted to ensure there was flexibility for the tax to be higher. The United States was pushing European countries to eliminate taxes on digital services, which the administration says are unfairly targeting American technology companies. France, Italy and Britain have resisted abandoning these taxes until the agreement is finalized and in force, a process that can take up to four years.
The joint statement or statement released on Saturday suggested that digital taxes would remain in place for now.
“We will provide appropriate coordination between the application of the new international tax rules and the elimination of all taxes on digital services and other similar measures relevant to all companies,” the statement said.