US Treasury Secretary Janet Yellen underlined her commitment to a global minimum corporate tax rate at the Chicago Council on Global Affairs on Monday 5 April. The announcement was welcomed by the Europeans.
“We are working with the G20 countries to agree to a global minimum corporate tax rate that can stop the race to the bottom”, she said.
The United States’ support in principle for Pillar II of the international tax reform discussed at the Organisation for Economic Co-operation and Development (OECD) and the G20 was already known, but this speech further strengthens the Americans’ resolve.
At the national level, the US government has also decided to impose a minimum tax of 21% on the foreign earnings of US companies.
At the end of February, Ms Yellen had already taken a step forward by abandoning, for Pillar I, the demand for a voluntary ‘Safe Harbour’ scheme (see EUROPE 12667/4) on the taxation of digital companies.
On Tuesday 6 April, the European Commission welcomed these two announcements by Ms Yellen. “We hope that the announcements by Secretary Yellen (...) will create a new momentum towards an agreement on a consensus-based global solution over the summer”, said Daniel Ferrie, a spokesman for the institution.
“The credibility of the process must be preserved “, he added, calling on all global partners to remain engaged in the talks and to continue the work “without delay”.
At the same time, Mr Ferrie reiterated the EU’s determination to move forward with a European solution, should the OECD negotiations fail.
For his part, the French Minister of Economy and Finance, Bruno Le Maire, welcomed the US support for the minimum tax, saying that “a global agreement on international taxation is now within reach”.
“We hope to be able to make progress with Janet Yellen on the taxation of digital services in order to reach a global agreement at OECD level next summer”, he added, indicating the French desire for a simultaneous agreement on Pillars I and II of the reform.
In a statement issued on Tuesday, MEP Sven Giegold (Greens/EFA, Germany) also called it a “historic opportunity to end global tax dumping”.
He said that if the large EU Member States pushed for a 21% minimum tax rate, the proposal could be accepted by the G20.
International tax reform will be on the agenda of the G20 Finance Ministers meeting (see EUROPE 12690/6) on Wednesday 7 April. (Original version in French by Marion Fontana)