WASHINGTON—The U.S. will accept a global minimum corporate tax rate as low as 15% in international negotiations, below the 21% level it has been seeking for U.S.-based companies’ foreign income, the Treasury Department said Thursday.
The move could make it easier to reach the multilateral agreement that Treasury Secretary Janet Yellen has been seeking, but an agreement at 15% would raise less revenue for governments. And, depending on where the U.S. sets its policies, a 15% minimum tax on companies headquartered outside the U.S. could give those businesses an advantage over those based in the U.S.
In a statement, the Treasury Department said it was encouraged by conversations with officials from other countries over the past few days.
“Treasury reiterated that with the global corporate minimum tax functionally set at zero today, there has been a race to the bottom on corporate taxes, undermining the United States’ and other countries’ ability to raise the revenue needed to make critical investments,” the statement said. “Treasury underscored that 15% is a floor and that discussions should continue to be ambitious and push that rate higher.”
The U.S. has been pushing for an agreement as part of President Biden’s corporate tax agenda, which calls for increasing the corporate tax rate to 28% from 21% and raising taxes on U.S. companies’ foreign profits.