The United States gave new impetus to negotiations on international taxation with a proposal, welcomed by Germany and France, to set a tax rate of “at least” 15% on the profits of multinationals around the world.
Washington’s proposal “would be a good compromise,” French Finance Minister Bruno Le Maire said before a meeting of European Union (EU) finance ministers in Lisbon.
“We can live with 15%, but the key question is to define a global framework for the digital tax and for a minimum tax and to reach a political commitment no later than the G20 in early July in Italy,” he added.
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The 15% minimum proposal “is really a big step forward,” German Finance Minister Olaf Scholz said more enthusiastically.
“I am very happy this morning that we have the prospect that this agreement, which we have been working on for so long, can be reached this summer,” he added.
The 15% rate is below what many Western countries practice.
France plans to lower its tax on corporate profits to 25% by 2022, while the United States wants to raise it from 21% to 28%. But in Ireland it is lower (12.5%), for example.
Tax havens, in the crosshairs
A rate of 15% would be a revolution for tax havens, the countries that the Organization for Economic Cooperation and Development (OECD) calls “jurisdictions with no or negligible taxes”, such as the Bahamas, British Virgin Islands, Jersey, Guernsey or United Arab Emirates.
These states play an important role in so-called “tax optimization” processes, often legal, which consist of shifting profits through a complicated game of subsidiaries, royalties and licenses, among others, until they achieve lower tax rates.
For years there have been negotiations in the OECD to set a harmonized tax on the profits of multinationals and better capture the profits of the internet giants.
The complex negotiations took on new momentum with the rise to power in the United States of Joe Biden.
The US president took a further step on Thursday when his administration proposed to his OECD partners to set the tax rate on profits of multinationals at 15% “at least”, the US Treasury said.
A “base” for negotiation?
The Treasury stressed that the 15% figure is “a base” and that discussions will continue with the objective of being “ambitious” and “increasing this rate.”
The OECD, which brings together 36 countries, hopes to reach a global agreement in principle at the G20 Finance meeting on July 9-10, and then at a final meeting in October.
Follow the news of El Espectador on Google NewsIt is the first time that the United States has formally proposed a rate. Until now, thresholds had been negotiated ranging from 12.5% to 21%.
If the OECD negotiations come to fruition, France has already said that a European directive on the matter will be adopted in the first half of 2022, during the French presidency of the Union.
In addition to a global minimum rate, this reform negotiated by the OECD envisages taxing multinationals on the profits obtained in each country, regardless of where they have their headquarters.
This second point looks in particular at digital companies, which often pay taxes that are unrelated to the income and profits they generate locally.
