Yellen: Tax shift for large corporations not likely until next year

Treasury Secretary Janet Yellen said on Sunday that a proposed global tax overhaul that would allow more countries to tax large corporations likely would not be up for consideration by U.S. lawmakers until next year.

Yellen said during a press briefing after a Group of 20 (G-20) finance meeting in Venice, Italy, that the Organization for Economic Cooperation and Development’s (OECD) plan to reallocate taxing rights was on a “slightly slower track” compared with the proposed global tax rate of at least 15 percent.

The G-20 finance leaders voiced their support for the OECD’s plan on Saturday, calling it “more stable and fairer.”

“After many years of discussions and building on the progress made last year, we have achieved a historic agreement on a more stable and fairer international tax architecture,” they said in a statement yesterday.

Yellen said toward the end of the briefing that she hoped to include ways to implement the “Pillar 2” minimum tax into a budget “reconciliation” bill this year.

“Pillar 1” of the proposed agreement would end unilateral taxes on digital services, which the U.S. considers to be discriminatory against its firms, and instead set up a new mechanism in which large profitable companies such as Google would be taxed by countries where they sell products and services instead of just countries that host their headquarters or other properties.

“Pillar 1 will be on a slightly slower track. We’ll work with Congress,” the Treasury secretary said. “Maybe it will be in ready in the spring of 2022, and we’ll try to determine at that point what’s necessary for implementation.”