07/15/2021

Yellen Says U.S. Companies Will Back Global Digital Tax Plan

She made the remarks in Venice this week for a Group of 20 meeting

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 percent 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 are 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, Facebook, Google 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 Yellen in June seeking assurances the Biden administration would not support any OECD plan that discriminates against U.S. companies.

"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, addressing Republican lawmakers' wariness.

This article was provided to OSAE by ASAE's Power of A and Inroads.