US will not support global tax plan with exceptions for China – Yellen
WASHINGTON (Reuters) – The United States will not accept any kind of special treatment for China or other countries that weakens a global minimum tax regime, US Treasury Secretary Janet Yellen said on Wednesday.
Yellen said the United States and other countries are continuing their efforts to convince China to support the plans approved by the Group of Seven advanced economies on Sunday.
She said she hoped Beijing would decide it was in its best interests to support the plans – which called for a global minimum corporate tax of at least 15% – but made it clear that Washington would not approve a weak agreement.
“We would not accept any kind of exception that would significantly weaken a robust global minimum tax regime. Not for China, not for other countries, ”Yellen told the Senate finance committee during a hearing.
“We want it to work and not be filled with loopholes. “
G7 finance officials agreed on June 5 to support a minimum corporate tax rate of at least 15%, a move approved by G7 leaders on Sunday.
But some countries, including China, are reluctant to forgo tax incentives to advance policy priorities ranging from stimulating research and development to attracting foreign investment, including special low-tax economic zones to attract foreign investors. Foreign investments.
An official briefed on the G7 talks told Reuters that China was against the 15% agreed by the G7 and that winning exclusions would be its condition to recover from the rate.
Finance officials from the Group of 20 Big Economies – including China – will focus on the US proposal for a global minimum tax when they meet in Venice in July.
Yellen told senators that the United States is pursuing all means to ensure that countries suspend or cancel taxes on digital services that Washington says discriminates against American technology companies, but would retain the tariffs as an option if that did not happen.
She said she had engaged in “very constructive” bilateral conversations with the Irish Minister of Finance on the issue and that she believed the entire European Union would ultimately support a tax hike. global minimums.
She said she hoped for progress on the tax issue, which is being negotiated under the leadership of the Organization for Economic Co-operation and Development, when the leaders of the Group of 20 major economies meet in October.
Yellen said the steps the United States is taking to raise its minimum corporate tax will help kick-start a large-scale deal. She said the United States is also proposing changes to prevent foreign companies working in the United States from shifting profits overseas.
Asked about rising consumer and durable goods prices, Yellen said the Biden administration was monitoring inflation “very carefully” and taking the issue seriously.
“No one wants to go back to the bad days of high inflation of the 1970s,” Yellen told the committee.
She said the current explosion in inflation reflected the difficulty of reopening the U.S. economy, and that the Biden administration was also taking action to address bottlenecks in some supply chains that had resulted in a price increase.
Reporting by Andrea Shalal; additional reporting by Dan Burns; Editing by Chizu Nomiyama, Diane Craft and Andrea Ricci