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EU backs U.S. name for world minimal company tax, however price to be determined By Reuters 

© Reuters. FILE PHOTO: FILE PHOTO: Yellen holds a information convention in Washington

By Jan Strupczewski

BRUSSELS (Reuters) – The European Fee backed on Tuesday a name from U.S. Treasury Secretary Janet Yellen for a world minimal company tax, however stated its price needs to be determined in talks within the Organisation for Financial Cooperation and Improvement (OECD).

Yellen stated on Monday she was working with G20 international locations to agree on a world company minimal tax price to finish a “thirty-year race to the underside on company tax charges”.

The U.S. plan envisages a 21% minimal company tax price, coupled with eliminating exemptions on revenue from international locations that don’t enact a minimal tax to discourage the shifting of jobs and earnings abroad.

“We stay dedicated to making sure that every one companies, together with digital ones, pay their justifiable share of tax, the place it’s rightfully due,” European Fee spokesman Dan Ferrie instructed a information briefing when requested in regards to the U.S. proposal.

The OECD has lengthy been engaged on two-pillar world taxation scheme, initially meant primarily for digital giants like Google (NASDAQ:), Amazon (NASDAQ:), Fb (NASDAQ:) or Apple (NASDAQ:), to tax corporations the place they make earnings even when they don’t have a bodily presence there.

The second pillar of the OECD scheme is to determine a world minimal tax price, which might apply to all corporations, not solely digital ones, in order that governments don’t compete with one another providing decrease taxes to draw giant multinational corporations.

“We welcome the sturdy help from all G20 Finance Ministers for an settlement on each OECD pillars by July 2021,” Ferrie stated.

“We hope that the bulletins of Secretary Yellen concerning the US place, withdrawing the protected harbour regime proposal and calling for a minimal company taxation, will spur a brand new momentum in the direction of settlement on a consensus-based world resolution this summer time,” he stated.

Requested if the EU would help the 21% price talked about by the U.S., Ferrie declined any touch upon figures. “We’re working in the direction of an answer within the framework of the OECD,” he stated.

An settlement amongst European international locations may not be simple as a result of company tax charges within the 27-nation bloc range broadly from 9% in Hungary and 12.5% in Eire to 32% in France or 31.5% in Portugal.

The EU’s makes an attempt to unify even what corporations are taxed on, somewhat than setting a typical tax price, have been stalled since 2011 as a result of taxation is a jealously guarded prerogative of nationwide parliaments and sometimes varieties a key a part of a rustic’s financial mannequin.

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