130 companies are restructuring the global minimum tax for large companies
Around 130 countries have approved the world organization At least Tax, an idea approved by President Joe Biden. The lower tax is part of an international effort to evade the tax of multinational corporations.
The deal was announced last Thursday. It is an attempt to address the difficulties of the connected and growing global online economy.
The contract pays at least 15 percent of the total tax. This is important as Biden is trying to raise more money for his U.S. employment program. Technical details still need to be developed. It will take at least 2023 for the deal to take effect.
The agreement was announced by the Paris-based Organization for Economic Co-operation and Development. The deal covers a portion of the profits of the world’s largest companies that are taxed in countries that do business online but may not have a physical balance.
The French Finance Minister Bruno Le Myre called it “the most important international tax treaty of the century”.
In personal agreements, the countries led by France have already begun to levy internet taxes on US technology companies such as Amazon, Google and Facebook. The United States considers this unfair trade practice. Under the new agreement, other countries will agree to deduct these taxes in support of the international minimum tax.
Former US President Donald Trump imposed a tax on French goods after the French announced they would tax American tech companies. France praised the Biden government for its efforts to reach international agreement.
“Bound Giants They have to pay fair shares wherever they do business, ”Biden said center A business has to pay more taxes than any online business because it is physically located in the country in which it operates.
US Treasury Secretary Janet Yellen called it a “historic day”.
Yellen said in a statement that the United States has been in “self-destructive” international tax competition for decades. “The United States is cutting the corporate tax rate,” he said, “to see other countries lowering their rates.” reply. She said it was a race to the bottom.
Yellen said lower interest rates carry money from building projects, education, and epidemiological initiatives.
Sand Carwin is a tax advisor and former treasury officer at KPMG, a professional services company. He said the deal was largely closed and in line with the US proposal. He said it was important for states to complete their tax treaties online.
According to the agreement, states can tax the profits of their foreign companies at up to 15%. This eliminates the reason for profit changes, as these are taxed domestically. The Organization for Economic Co-operation and Development estimates these tax evasion practices cost between $ 100 billion and $ 240 billion each year.
Not all of the 139 countries that joined the talks have signed the agreement. Irish Finance Minister Basel Donohue said there was public support for the deal, but at least 15 percent disagreed. He said the rate of 12.5% of the land was a “reasonable rate”. Ireland said it would continue talks in the future.
Two of the signatories to the conference were Bermuda and the Cayman Islands Tax havensThe main economic powers are China and India.
Further negotiations are expected from the 20 largest economies in the world, the so-called G-20. The G20 finance ministers will meet in Venice next week. Countries have to sign the agreement Versatile Agreement, at least corporate income tax can be accepted by each state through its national law Arbitrarily, at your own discretion.
Tax experts say the voluntary system will work if countries with headquarters in many multinational corporations like the United States and Europe agree. This sends the message that profits available anywhere in the country are at least taxed.
In the United States, Biden proposed a minimum rate of 21% on foreign income to prevent large American corporations from changing their profits. In the US, Biden’s tax plan must first pass Congress, where the Democrats have a slim majority.
I am Gregory Statell.
David McHugh shared the news with the Associated Press. Gregory Statell adapted it for VOA English learning. Susan Shand was the teacher.
The words of this story
At least – description As little or as little as possible based on size or degree
giant – Nm A person or thing that is great, powerful, or successful
center – description In the middle of a range of possible sizes or sizes
reply – Nm In response to something said or written
Line sky – Nm A place where people live and businesses work to avoid high taxes
Versatile– description Add more than two groups or two countries
Volunteers – description Ready-made or delivered as you wish, because you have to: choose or give