The French and German Finance Ministers welcomed the US Treasury’s support for a 15% global minimum corporate tax in Lisbon on Friday 21 May.
The latest US proposal could be “a good compromise” in the Organisation for Economic Co-operation and Development (OECD) negotiations, but “the key issue is to have a compromise on the two pillars” of international tax reform - digital taxation and minimum taxation - in order to reach agreement on a “global framework” at the G20 summit in Rome in July, said France’s Bruno Le Maire on his arrival at the Eurogroup meeting (see other news).
“This is really a big progress”, said Germany’s Olaf Scholz, for whom this announcement shows that an agreement is possible.
On Thursday evening, the US Treasury had announced its support for a minimum global tax of 15%. This rate should be considered as “a floor”, the Treasury said in a statement, believing that the discussions could lead to a higher threshold. The Treasury pointed out that the current zero tax rate had led to a race to the bottom, exacerbated tax competition and eroded the tax base.
In an earlier proposal, the ‘Biden’ administration had suggested a minimum tax rate of 21%. France had initially proposed a rate of 12.5%.
In Lisbon, EU Commissioner for Economy Paolo Gentiloni welcomed “a step forward” in the search for an international agreement. He recalled that any agreement in principle reached at G20 level will still need to be translated into detail at OECD level.
Asked about the US announcement upon his arrival in Lisbon, Luxembourg’s Finance Minister Pierre Gramegna stated that negotiations were still “open”, but said that a global agreement would make life easier for all jurisdictions.
See the US Treasury release: https://bit.ly/3yu0G6h (Original version in French by Mathieu Bion)