Treasury Secretary Janet Yellen said this week that she expects U.S. companies to support a global plan for taxing large multinational corporations.
Yellen was in Venice this week for a Group of 20 meeting where finance ministers endorsed a U.S. compromise that would apply new global tax rules to no more than 100 large multinational corporations. The U.S. plan would set a minimum tax rate of at least 15% to prevent companies from relocating to low-tax havens and establish a system for sharing some of the profit imposed from taxing large multinationals based on where they operate and not where they’re headquartered.
The Organization for Economic Cooperation and Development (OECD) has been trying to reach agreement among nearly 140 countries on a global tax overhaul to address how “consumer-facing” digital giants like Apple, Google, Facebook and Twitter are taxed in countries where they have users. The OECD’s work has taken on some urgency as some countries have grown impatient and proposed their own digital tax plans while hoping for an international consensus.
If an agreement is reached this year, the U.S. could need bipartisan support in the Senate to approve U.S. cooperation. Sen. Mike Crapo (R-ID), ranking member on the Senate Finance Committee, sent a letter to Treasury Secretary Janet Yellen in June seeking assurances that the Biden administration would not support any OECD plan that discriminates against U.S. companies.
Yellen addressed the wariness of Republican lawmakers by saying, “To the extent that the Republican side is going to be looking to business and trying to protect business interests, my guess is that businesses are going to be saying to members of Congress, please approve this,” Yellen said.