US Treasury Chief Calls for International Corporate Income Tax
In her first major address as US treasury secretary, Janet Yellen said the Biden administration will work with the Group of 20 countries to set up a minimum global corporate income tax, citing a “30-year race to the bottom” in which countries have slashed corporate tax rates to attract multinational businesses.
The move is seen as an effort to offset any disadvantages that might arise from Biden’s plan to increase US corporate tax rates such as US companies relocating overseas in search of better taxation deals.
“It is important to work with other countries to end the pressures of tax competition and corporate tax base erosion,” Yellen said in a virtual speech to the Chicago Council on Global Affairs.
Yellen’s speech comes as the Biden administration’s infrastructure proposal, known as the American Jobs Plan, calls for a raise in the corporate income tax rate from 21% to 28% to fund the ambitious $2 trillion package. The plan would establish that the tax will be calculated on a per-country basis to deter companies from sheltering profits in international tax havens.