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Home Breaking News US wants multinationals to be taxed in countries where they operate |...

US wants multinationals to be taxed in countries where they operate | NOW

The US is introducing a tax proposal in which multinationals pay taxes in every country where they have activities instead of just in the country where their headquarters are located. In doing so, the country is joining the negotiations that the international economic organization OECD is conducting with more than a hundred countries about a global tax plan.

The British newspaper Financial Times was able to see documents in which Joe Biden’s government outlined the plan. The idea would be that companies would be imposed a tax rate per country based on their turnover in that country. It does not matter whether they are actually physically present there.

With this, the US wants to ensure that, for example, tech companies that have activities around the world no longer settle in tax havens but pay a fair contribution everywhere.

OECD welcomes American aid

The plan is in line with negotiations conducted by the Organization for Economic Cooperation and Development (OECD) with more than a hundred countries on a similar system. This consists of two pillars: one regulates how multinationals have to pay taxes, the other deals with a worldwide minimum tax level for companies. However, there is a leak in the second pillar that causes companies to pay less tax than they claim, the Dutch tax expert Maarten de Wilde recently discovered.

The American plan is in line with the first pillar and the OECD therefore welcomes the aid. “This is reviving the negotiations and is very positive,” said chief negotiator Pascal Saint-Amans. “The proposal will stabilize the way companies are taxed in the post-corona period.” The OECD wants to present its plan in three months.

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Financial Times adds that Biden sees the measure as an opportunity to increase corporate tax in his country without fear of companies fleeing the US. Biden recently proposed raising that corporate tax from 21 to 28 percent to pay for his $ 2 trillion ($ 1.7 trillion) corona support package.

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