Nine Countries Reject Global Minimum Tax Deal, Sending It Down Rocky Road to Completion

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.

"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 for much of the last decade-aims to force large Multinational Enterprises to pay tax where they operate and earn profits, while seeking to end a race to the bottom on international corporate tax rates.

Pillar two, with its global minimum corporate income tax rate of at least 15 percent, is estimated to generate around $150 billion in additional global tax revenues per year.

The Biden administration's appeal for international cooperation on the global corporate minimum tax rate is a bid to at least partially counteract any disadvantages that might arise from the president's proposal to raise the U.S. corporate tax rate to 28 percent, a move panned by Republicans and business groups as hurting the competitiveness of U.S. companies and slowing wage growth.

"With a global minimum tax in place, multinational corporations will no longer be able to pit countries against one another in a bid to push tax rates down and protect their profits at the expense of public revenue. They will no longer be able to avoid paying their fair share by hiding profits generated in the United States, or any other country, in lower-tax jurisdictions," Biden said in a statement.

Treasury Secretary Janet Yellen is expected to press G20 counterparts this week for a global minimum corporate tax rate above the 15 percent floor agreed by the 130 countries last week, but a rate decision is not expected until future phases of negotiations, Treasury officials said on Tuesday.

https://www.theepochtimes.com/nine-countries-reject-global-minimum-tax-deal-sending-it-down-rocky-road-to-completion_3889586.html