© Reuters. US Treasury Secretary Janet Yellen arrives to attend the G20 meeting of finance ministers and central bank governors in Venice, Italy on July 9, 2021. G20 Italy / Prospectus via REUTERS
VENICE, Italy (Reuters) – US Treasury Secretary Janet Yellen said on Saturday she would work to try to address the concerns of countries that have not signed a global agreement on corporate taxes, but added that it was not necessary to all nations. to adopt it.
Speaking to reporters together with German Finance Minister Olaf Scholz, Yellen said he believed that some of the concerns of countries like Ireland, Estonia and Hungary could be addressed in the run-up to the G20 leaders’ summit in October.
“We will try to do that, but I must emphasize that it is not essential that all countries are on board,” he said.
“This agreement contains a kind of enforcement mechanism that can be used to make sure that countries that are holdouts cannot undermine – use tax havens that undermine the functioning of this global agreement.”
When asked how he would get a divided US Congress to participate in the deal, Yellen said he was working with Congressional tax-writing committees on a budget resolution that would use budget “reconciliation” rules.
These rules would allow passage with a simple majority in the United States Senate, where Democrats have a majority of one vote if all members of their party are aligned.
“I am very optimistic that the legislation will include what we need for the United States to comply with Pillar 2,” Yellen said, referring to the part of the Organization for Cooperation and Development (OECD) that governs the minimum tax.
The Biden administration has proposed raising the existing US minimum tax on foreign intangible income to 21% and instituting a new minimum tax that would deny deductions to companies that make tax payments to countries that do not adopt the minimum tax.
Yellen said the OECD tax deal, originally agreed to by 131 countries and now backed by G20 governments, was good for all governments and would boost revenue by ending a “race to the bottom” with competing countries. for cutting corporate tax rates.
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