USA proposes global minimum tax
After its decision to remove the safe harbour proposal, which had stalled the OECD negotiations, the USA has now proposed a global minimum tax for companies, including the tech sector. It is also proposing that companies pay tax based on their sales in each country, regardless of physical presence. The proposals will only affect very large companies with high profit margins.
The US proposals, which mark a significant U-turn in US tax policy, were shared with the 135+ jurisdictions negotiating a new tax framework at the OECD. The proposals have been welcomed by several countries.
Meanwhile, tax experts will be waiting for more reactions, especially from EU countries which have already introduced unilateral corporate tax rules, and from the European Commission which is intent on proposing new rules at the regional level by mid-2021. Negotiations will also continue among the G7 and G20 countries.