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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, WASHINGTON, July 6 – US Treasury Secretary Janet Yellen will press G20 counterparts this week for a global minimum tax rate higher than the 15% floor agreed by 130 countries last week, but a rate decision is unlikely until later stages of OECD deliberations, according to US Treasury sources. Officials also stated that a new digital fee, which the European Commission is anticipated to propose in the next weeks to fund COVID-19 recovery, is incompatible with European Union commitments to the OECD framework agreement agreed on July 1. The accord, which covers all G20 countries, calls for the abolition of digital services taxes in favor of a new reallocation of some taxing rights on large, high-profit multinational corporations from countries where their headquarters and intellectual property are located to market countries. It may not be implemented until after 2023. find out more The fee, according to European Commission executive vice president Margrethe Vestager, will be paid mostly by European firms to repay 750 billion euros ($886 billion) in loans for a post-pandemic recovery fund. find out more The Treasury official did not clarify what action the US would take if the EU went ahead with its plans, but he did stress that any new unilateral digital charges should wait until final rules on international taxation rights are hammered out. The US Trade Representative’s office is still threatening retaliatory tariffs against numerous nations that have digital services taxes that have been deferred until November to allow for the finalization of a deal. The European Commission released a statement on Tuesday after a video conference between Yellen and Vestager, claiming the two had a “positive and productive first interaction” on digital taxes and international tax negotiations. According to the officials, the Biden administration will require congressional approval to implement aspects of the digital tax deals. Yellen is also working with the Senate Finance Committee and the House Ways and Means Committee to incorporate measures in budget reconciliation legislation to execute the international tax deals, according to the report. Democrats in Congress have stated that they want to pursue such legislation, which is expected to include new social program investments as well as tax increases on corporations and the rich in the United States, if required without Republican votes. David Lawder and Andrea Shalal contributed reporting, and Franklin Paul and Barbara Lewis edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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