The European Union as an institution, as well as individual partners such as Germany, France and Spain have been demanding for some time a fiscal policy with minimal restrictions at the global level that ends imbalances between regions and competition between countries. Now, with the United States in the same boat, reaching this goal seems closer than ever. Yesterday, US Treasury Secretary Janet Yellen announced her intention to submit a proposal to the G20 to coordinate corporate tax globally, and just one day later, Berlin, Paris and Madrid, as well as Brussels, opened the conditions for the new administration’s proposal.
Prime Minister Pedro Sanchez this Tuesday praised Yellen’s plans in favor of imposing minimal corporate taxes on a global level. The debate about tax harmonization on a European and global scale is “progressive” and “I am pleased that the United States has embraced the progressive agenda in the economic policy that the government of Spain has been defending for so long,” as noted after the Council of Ministers.
For Sanchez, opening this type of debate is “essential” so that the establishment of a minimum rate in companies and the taxation of large digital platforms, known as Google’s rate, can be addressed around the world.
In the same context, German Finance Minister Olaf Schultz said on Tuesday also: “I am optimistic that through this corporate tax initiative, we will be able to end the global race to the bottom in terms of taxation,” he said. No. Without adding that any agreement should include new rules dealing with how to tax the cross-border businesses of the digital giants, which is one of the issues being discussed within the Organization for Economic Cooperation and Development (OECD).
Among those who welcomed Yellen’s proposal is French Finance Minister Bruno Le Maire, one of the voices most at odds with the previous Trump administration when it comes to global taxation. “The agreement on international taxation is now on Our range. He stressed that this historic opportunity we must take advantage of. “.
The European Commission itself also showed confidence on Tuesday in Yellen’s approach Facilitate an agreement this summer on this at Organization for Economic Cooperation and Development. “We hope that Minister Yellen’s statements (…) will appear A new impetus to resolve my compromise this summer. “ Economic spokesman for the executive authority Society, Daniel Ferry, who mentioned that taxes are levied on The digital economy is a “top priority” for Brussels.
However, the community spokesperson wanted to be reminded that the committee remains “committed” when it comes down to it Ensure that multinationals pay a “fair” share of taxes wherever they are making a profit. For this reason, he indicated that the European Union will resume its plans to impose a European tax if the OECD negotiations do not bear fruit.
The Biden administration wants to set a 21% minimum tax rate for US companies, regardless of where you get taxable income, compared to 10.5% today. It will also increase to 28% as a maximum. Hence, the lower bound proposed by the United States is higher than what has been discussed So far in the Organization for Economic Cooperation and Development, which was closer to 12.5%. It also beats the 15% one studied in Spain.
The International Monetary Fund supports this plan
The International Monetary Fund (IMF) also supported the possibility of setting a global minimum tax to impose taxes on corporate profits, as indicated by the chief economist of the International Foundation, Gita Gopinath, in data compiled by the European press. “We have always supported the imposition of a minimum corporate tax at the global level,” Gopinath said after the report was published. World Economic OutlookWhere the economist reiterated the important concern of tax evasion and avoidance.
In this sense, the chief economist at the International Monetary Fund avoided providing a specific figure for what would be the appropriate minimum tax in the opinion of the International Monetary Fund, and only indicated that this question “is being studied by the institution.” He pointed out that “governments must rebuild their financial positions after the crisis, and for that, measures will be necessary.”
In its report, the International Monetary Fund defends the possibility of generating fiscal space through measures that not only increase income but also improve progress, either by raising taxes on the richest people and the highly profitable companies that have been seen least affected by the epidemic, thus closing internal financial loopholes. Reduce tax expenditures and improve revenue management.