A two-pillar framework agreed to by the OECD for taxing large multinational corporations represents a paradigm shift in the way that these companies are taxed—allocating the right to tax certain excess profits of very large companies to “market” jurisdictions and creating a global minimum corporate tax— but concerns about the long-term political viability of the proposal merit consideration.
The OECD two-pillar approach represents a historic opportunity to address global challenges. Serious equity concerns persist around the process and the current framework, though. Without an equitable final framework, it is hard to imagine that any agreement will be sustainable, as per G-24 warnings.
Decisions being made by the U.S. Congress in the coming days and weeks about how the U.S. should reform its international corporate tax system will have big consequences for U.S. government revenues and for America’s workers and families.
Yesterday, investors with over $2.9 trillion in assets under management called on the Financial Accounting Standards Board (FASB) to prioritize public country-by-country tax reporting as part of FASB’s future standard-setting agenda. Signatories represented a broad coalition of asset managers, public pension funds, labor funds, international investors, foundations and religious investors.
FACT urges the House Ways & Means Committee to make critical revisions to its draft Committee Tax Plan (the “Plan”) to help curb tax-haven abuse, protect American jobs, and begin to meet the challenge set by the Biden Administration to end the international race to the bottom in corporate tax collections.
The Financial Accountability and Corporate Transparency (FACT) Coalition welcomes the discussion draft released today by Senators Wyden, Warner, and Brown on international corporate tax reform. While the draft legislation would curb tax-haven abuse, protect American jobs, and begin to meet the challenge set by the Biden Administration to end the international race to the bottom in corporate tax collections, more can be achieved through the inclusion of additional measures to equalize U.S. foreign and domestic corporate tax rates in the final legislation.