Monopoly: Biden proposal calls on major multinationals to pay national tax based on local sales
The Biden administration has proposed a new model to tax multinational corporations, calling on the world’s largest businesses to pay taxes to governments based on their sales in each country such as part of the global minimum tax agreement.
In a document sent to 135 countries to negotiate international taxes at the OECD in Paris and obtained by the Financial Times on Wednesday, the U.S. Treasury Department laid out a plan to apply to corporate global profits. the largest, including major US tech corporations, regardless of their actual presence in a given country.
The goal of the plan is to catalyze negotiations at the OECD, an international organization of rich nations, with the promise of a more stable international tax system that will prevent an increase in technical taxes. digital country and break the pattern of tax avoidance and profit shifting. by many multinational companies.
US concessions in the week of IMF and World Bank spring meeting as the White House calls for a US business tax increase to about $ 2.5 billion over the next 15 years to pay off more than $ 2 billion in investments in infrastructure, clean energy, and manufacturing.
After nearly a decade, the OECD tax negotiations have been split into two parts. The first pillar is designed to establish a new mechanism for taxing the largest multinationals, while the second is designed to address the global minimum tax, which The US has a target of 21%.
An OECD deal would allow Joe Biden’s administration to raise corporate taxes on American companies without fear of being cut back by other countries as it would include a widely applied global minimum tax rate.