Global Tax Deal Faces Hurdle in U.S.
The OECD wants to finalize the agreement soon and implement it by 2023
The Organization for Economic Cooperation and Development (OECD) won support last Friday from 136 out of 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 wants to finalize the agreement soon and implement it by 2023. The plan gained considerable steam after Biden administration officials negotiated a compromise that would apply new global tax rules to no more than 100 large multinational corporations. The plan would set a minimum tax rate of at least 15% 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, not where they’re headquartered.
While the accord is expected to win support from the world’s largest economies – the G-20 – later this month in Rome, the U.S. likely will need bipartisan support in the Senate to approve U.S. cooperation.
Several Republican lawmakers objected to the deal this week, including the House’s top Republican tax writer, Rep. Kevin Brady (R-TX), who argued that the Biden administration is agreeing to a deal at the same time that it wants to raise taxes on American companies’ foreign profits.
“Despite the fanfare surrounding the Administration’s foreign tax deal, creation of this global tax cabal is no cause for celebration,” Brady’s office said in a blog post. “It confirms President [Joe] Biden’s willingness to surrender American jobs and provide protection to foreign competition – not to American companies and workers.”
This article was provided to OSAP by ASAE's Power of A and Inroads.