December 9, 2023

Global deal to end tax havens is gaining momentum

Global deal to end tax havens is gaining momentum

People familiar with the negotiations said that while the 15 per cent rate was essentially a done deal, some of the world’s largest countries continued to fight for waivers to mitigate the impact on long-running economic models that helped attract investment and jobs to achieve.

“I am absolutely determined to pave the way for consensus because we are still far from a global agreement on a new international tax regime for the 21st century,” French Finance Minister Bruno Le Maire told CNBC on Wednesday. “Of course there are some member states that are calling for a delay, an implementation period, a transition period; we are completely open to such suggestions.”

Despite growing support for the Convention, concerns remain about its implementation and uniform application around the world.

India, China, Estonia and Poland said the minimum tax could affect their ability to attract investment through special incentives such as research and development loans and special economic zones that offer tax breaks to investors. For example, China has long used special economic zones with low tax rates to attract foreign investment, which benefits its economic development.

The United States is one of the strongest supporters of the agreement, but it also faces challenges to ensure that pledges made by the Biden administration by Congress are implemented. Biden’s economic agenda is on hold, and Democrats are trying to figure out how to make changes to the tax code that will ensure the United States adheres to the international deal they want to broker.

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The Treasury declined to comment on the details of the deal, noting that negotiations are still ongoing but optimistic that the deal will be finalized at a meeting of G20 leaders in Rome later this month.

Alexandra Lamana, a Treasury spokeswoman, said Treasury Secretary Janet L. Yellen was “very focused on progress in reaching a historic agreement and expects countries to unite around the final parameters of a new international tax regime.” The deal will help create more jobs and investment in the United States, and will benefit workers.