The Biden administration’s treasury secretary, Janet Yellen, proposed, Monday, April 5, 2021, the introduction of a minimum taxation of multinationals at the global level to put an end to unfair tax competition.
A minimum tax rate for multinationals to end unfair tax competition
Janet Yellen exposed Monday, April 5, 2021, two days before the meeting of G20 finance ministers, the Biden administration’s proposal to put in place international legislation for the taxation of multinationals and in particular minimum taxation to put an end to the unfair tax competition that has governed the international tax universe for 40 years. “ We are working with the G20 countries to agree on a minimum global corporate tax rate, which can stop the race to the bottom », She declared during her speech.
This statement is part of Joe Biden’s desire to finance part of his recovery plan to 2.200 billion euros by counting on an increase in corporate tax. Raising the rate from 21% to 28% (rate currently in force in France). Only this increase in corporate taxation will only be of real interest to the United States if American multinationals no longer have the possibility of taking advantage of more attractive corporate tax rates in tax havens.
The end of tax havens
When announcing his stimulus plan, Joe Biden had also highlighted that in ” 2019, 91 Fortune 500 Companies, World’s Largest Companies Including Amazon Using Various Loopholes To Avoid Paying A Single Penny In Federal Income Tax “Adding:” I don’t want to punish them, but it’s wrong. A firefighter and a teacher pay 22%? Amazon and 90 other big companies pay no federal taxes ? I will put an end to this ”.
This American proposal would undermine tax havens like Ireland or Luxembourg. For Janet Yellen, setting a minimum corporate tax rate at the global level means allowing “ that all citizens share the burden equitably »Tax.