On Capitol Hill in Washington, DC, United States, on June 23, 2021, US Treasury Secretary Janet Yellen answers questions during a Senate Appropriations Subcommittee hearing to evaluate the Treasury Department’s FY22 budget request. Pool/Greg Nash REUTERS via (Reuters) – VENICE, July 11 (Reuters) – Janet Yellen, the US Treasury Secretary, warned on Sunday that a new mechanism to allow more countries to tax huge, extremely wealthy multinational corporations may not be ready for Congress to examine until the spring of 2022. After a G20 finance chiefs meeting in Venice, Italy, Yellen said the OECD’s “Pillar 1” re-allocation of taxing powers was on a “significantly slower pace” than a global corporate minimum tax of at least 15% as part of a big tax accord among 132 countries. The plan was accepted by G20 finance ministers and central bank governors over the weekend, but worries remain about President Joe Biden’s administration’s ability to persuade a highly divided Congress to ratify the modifications. Yellen stated that she planned to add measures for the implementation of the so-called “Pillar 2” global minimum tax in a budget “reconciliation” package that Congress might pass with a simple majority this year. In exchange for a new mechanism that allows large profitable companies to be taxed in part based on where they sell products and services, rather than where their headquarters and intellectual property are located, the “Pillar 1” portion of the agreement would end unilateral taxes on digital services. According to a Treasury official, this will necessitate a multilateral tax agreement, which will take time to negotiate. “Pillar 1 will move at a more leisurely pace. We’ll collaborate with Congress “When asked if a two-thirds majority in the US Senate is required for international accords, Yellen responded no. “It could be available in the spring of 2022,” Yellen said, “and we’ll try to figure out what’s required for implementation at that time.” David Lawder and Gavin Jones contributed reporting, while Hugh Lawson edited the piece. The Thomson Reuters Trust Principles are our standards./n
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