US Pushes Tax Payment in Revenue-Generating Countries
Offers Incentives for Global Minimum Corporate Tax Rate Adoption
[Asia Economy New York=Correspondent Baek Jong-min] The Joe Biden administration in the United States is reportedly proposing a new tax system to governments worldwide, under which multinational corporations pay taxes to each government based on the revenue generated in that country. This means that companies like Apple, Google, Facebook, and Amazon, which have earned huge profits in Korea without paying taxes, would also have to pay taxes to the Korean government.
According to foreign media on the 7th (local time), the U.S. Treasury Department sent a letter containing this proposal to 135 countries discussing the international tax system at the Organisation for Economic Co-operation and Development (OECD).
This aims to establish a fair international taxation system, promote the introduction of a global minimum corporate tax rate that the U.S. is pushing for, and prevent multinational corporations such as Apple, Google, Facebook, and Amazon from exploiting tax loopholes.
If the U.S. proposal is passed, governments of countries where major U.S. information technology companies and other multinationals operate will be able to expand taxation. This means it will no longer be possible to avoid paying taxes through tax havens and other means.
The U.S. proposal is expected to further accelerate discussions on digital taxes currently underway at the OECD.
Major foreign media have evaluated the U.S. plan as an effort to end the 'race to the bottom' in corporate tax cuts among governments worldwide.
The U.S. government is pushing to raise the corporate tax rate from the current 21% to 28% to secure $2.25 trillion in funding needed for investment in outdated infrastructure, while promoting international cooperation to establish a global minimum corporate tax rate.
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