On Wednesday, the United States imposed an increase in tariffs on imported goods from six countries. However, they have continued to suspend the application of increased tariffs in order to provide more time for a global agreement on taxing giant technology companies within the scope of the ongoing discussion in the OECD and the G-20.
Yesterday, the US Department of Commerce imposed a 25% tariff on products imported from India, Turkey, the UK, Italy, Spain and Austria in response to these six countries’ implementation of taxes on US tech giants such as Google and Facebook. And Amazon. In 2019, the products targeted by this tariff escalation were $2 billion, Bloomberg wrote, explaining that they range from Italian shoes to Turkish rugs, including the import of seafood or cosmetics.
However, soon after, he reported that the application of these increased tariffs would be delayed for up to 180 days in order to allow more time to negotiate an international agreement on creating a minimum tax capable of preventing multinational corporations from not paying taxes on profits in a particular country. Because it is located in countries with low tax burdens, it is an issue that has been negotiated at the level of the Organization for Economic Cooperation and Development and the Group of Twenty. “The United States is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns about taxation of digital services,” said Catherine Tay, US Representative, quoting US press, American Trade.
Catherine Taye explained that the decision of the administration headed by President Joe Biden aims to “provide time for negotiations.” [na OCDE e G20] Continuing to make progress”, while maintaining the possibility of Washington responding to the actions of other countries that are seen as asymmetric practices at the trade level,
Remember that after taking office as President of the United States, Democrat Joe Biden began a series of setbacks regarding the policies pursued by his predecessor Donald Trump, both in domestic affairs and internationally. However, despite indicating the intent to follow a path of multilateral negotiations to end trade disputes, Biden warned that the United States would not fail to look after its commercial interests.
As such, last March the US Commerce Department proposed applying new tough tariffs to those six countries with a combined value of $880 million.
The global minimum corporate income tax rate is gaining traction
This US action is another sign of pressure so that, at the international level, an agreement can be reached providing for the adoption of a minimum tax rate for multinational corporations.
Earlier this week, Reuters reported on a working document from the finance ministers of the world’s seven richest economies, which indicated an expectation that it would be possible for the Group of Seven industrialized nations to reach an “ambitious” agreement on a global minimum tax. on corporate earnings at the meeting to be held on Friday and Saturday the fourth and fifth of June.
For his part, the European Commissioner for the Economy, Paolo Gentiloni, said he believed, at the end of the last Eurogroup, that it would be “possible to reach an agreement in principle at the level of the G-20” already at the scheduled meeting. On July 9 in Venice.
To fund the ambitious economic and social plans already approved, Joe Biden decided to increase taxes on corporations and the richest (capital gains). As part of this process, Biden’s chosen Treasury chief, Janet Yellen, proposed in April establishing a minimum global corporate income tax rate of 21%, a proposal that has since evolved into a tax of at least 15%.
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