Window closes for US to implement global corporate tax deal

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Democrats have proposed a list of changes to the current system in their reconciliation bill that seek to bring the tax in line with world efforts, including raising the GILTI rate to around 15%, charging it country by country, and adjusting the existing rules to apply the system.

Under current rules, tax paid and profits or losses anywhere except the United States are combined to calculate GILTI. Under the Democrats’ new rules, which are in line with the OECD effort, companies would have to assess their tax in each country they operate in and pay at least 15% in each location, which would mean that any losses or payments High taxes in one location couldn’t offset the taxes due for businesses elsewhere.

It is clear that this effort is a priority for the administration. Assistant Secretary of the Treasury for Tax Policy Lily Batchelder described the global minimum tax agreement as one of the Biden administration’s greatest achievements during a virtual Brookings Institution and Tax event. Policy Center last month.

Treasury Secretary Janet Yellen spent part of May in Europe where she called for the international deal to be pushed forward. During a speech at the Brussels Economic Forum, Yellen said the European Union and the United States “must show leadership in quickly implementing the global minimum tax into our national laws,” according to his prepared remarks. .

The EU may be on the verge of rolling out its version of the 15% minimum tax, but that requires unanimity that Poland is blocking. During his trip, Yellen discussed the issue with Polish officials. She told reporters the talks did not lead to a breakthrough, but held out hope that Poland would agree soon, according to Reuters.

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