Global Minimum Tax Agreement Officially Ends in the US

On January 20, US President Donald Trump announced that the global minimum tax agreement for businesses is not effective in the world's largest economy .

US withdraws from global minimum tax agreement. (Source: Shutterstock)

The move means the US withdraws from the landmark 2021 agreement that the Biden administration negotiated with nearly 140 countries.

In a presidential memorandum issued hours after taking office, Mr Trump also directed the US Treasury Department to prepare “safeguards” for countries that have – or are likely to – adopt tax rules that disproportionately affect companies in the world’s largest economy.

The European Union (EU), Britain and other countries have adopted a global minimum corporate tax rate of 15%, but the US Congress has never approved measures to bring businesses into compliance.

Washington maintains a global minimum tax rate of around 10% - part of Mr Trump's landmark 2017 tax cut package approved by Republicans.

After years of stalled negotiations on global tax issues led by the Paris-based Organization for Economic Cooperation and Development (OECD) to end competitive corporate tax cuts, then-US Treasury Secretary Janet Yellen agreed to the deal in October 2021.

However, President Trump's nominee for Treasury Secretary Scott Bessent said that implementing a global minimum tax agreement would be a "grave mistake."

The withdrawal from the global tax agreement marks a major setback for international cooperation on corporate tax issues, observers say. The move not only increases tensions with allied countries but also creates risks for US companies facing inconsistent tax regulations around the world.

However, President Trump and his advisers still believe that the decision will better protect the US economy, while strengthening the country's position as a competitive and independent investment center against international pressure.

Source: https://baoquocte.vn/thoa-thuan-thue-toi-thieu-toan-cau-chinh-thuc-het-hieu-luc-tai-my-301692.html