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"I'm in high spirits that with this corporate taxation
initiative, we'll manage to put an end to the worldwide race to
the bottom in taxation," Scholz said. He added that any deal
must include new rules how to tax cross-border business by
digital tech giants.
Yellen said on Monday that she is working with G20 countries to
agree on a global corporate minimum tax rate and pledged that
restoring U.S. multilateral leadership would strengthen the
global economy and advance U.S. interests.
As part of an overhaul of U.S. corporate tax, the Biden
administration wants to set a minimum tax on U.S. corporations
of 21% no matter where they earn the income being taxed, up from
10.5% currently.
Countries are negotiating a global minimum corporate tax rate at
the Organisation for Economic Cooperation and Development to
discourage big multinationals from being able to legally book
profits in low-tax countries like Ireland regardless where their
income is earned.
The proposed U.S. minimum is higher than what has been discussed
so far at the OECD, which has been closer to 12.5% and happens
to be the current Irish corporate tax rate.
A French Finance Ministry source said that it was far from
certain that the proposed 21% U.S. minimum would make it through
Congress.
"It won't necessarily be the reference rate for the minimum tax
that gets decided at the OECD," the source said.
"We think that the shift in the American administration's
position can breathe new life into negotiations with European
countries with extremely low rates," the source added.
(Reporting by Michael Nienaber, additional reporting by Leigh
Thomas in Paris; editing by Madeline Chambers and Philippa
Fletcher)
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