The US Treasury Secretary, Janet Yellen, recently announced that she has no intention of agreeing to any measures that would treat some countries such as China as exceptions to the common minimum corporate tax rate agreed by the seven major countries (G7). The United States has said it is working with other countries to continue to persuade China to accept the international minimum tax rate and hopes China will decide that it is in its national interest to support it.
The G7 Finance Ministers’ Meeting agreed on the 5th of this month to set a minimum corporate tax rate common to all countries at least 15%. It was approved at the G7 Summit (G7 Summit) on the 13th. However, some countries, including China, are reluctant to abolish it, as they are implementing tax incentives, including special economic zones, with priority policies on research and development (R & D) promotion and attracting foreign investment.
An official familiar with the G7 talks told that China opposes a minimum corporate tax rate of 15% and that exemption would be a condition of support. Twenty countries and regions (G20), including China, are expected to take up the international minimum tax rate proposed by the United States as a major agenda item at the Finance Ministers’ Meeting at Venice, Italy, in the month of July.
Yellen also said the United States is doing everything in its power to suspend or withdraw digital service taxes and has said it will take tariffs. She said that she had “extremely constructive” talks with the Irish Treasury Minister and said she was confident that the European Union would ultimately support the US proposal to raise the international minimum tax rate.
Furthermore, she said that she hopes the taxation talk under the Organization for Economic Co-operation and Development (OECD) leadership will progress by the G20 summit in October. She also pointed out that the move toward a corporate tax increase in the United States will help give momentum to international agreements. She also said he was making proposals to prevent foreign companies operating in the United States from transferring profits overseas.
Regarding the recent rise in US prices, the Biden administration has said that it is watching inflation “extremely closely” and has taken the issue seriously. She said rising prices show how difficult it is to restart the US economy and that the administration is responding to the disruption of the supply network, which has led to higher prices. Regarding relations with China, she said that decoupling would proceed in some sectors to protect the national security of the United States. However, she expressed concern about the decoupling of the technical department. In addition, she said that the leakage of taxpayer information by the Internal Revenue Service (IRS) was “extremely serious” and that he would take measures such as data preservation as necessary.