UK’s Labour pushes for vote on U.S. minimum corporation tax plan

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UK’s Labour pushes for vote on U.S. minimum corporation tax plan


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Economy5 hours ago (May 23, 2021 05:40PM ET)

UK's Labour pushes for vote on U.S. minimum corporation tax plan
© Reuters. FILE PHOTO: British opposition Labour Party leader Keir Starmer debates Prime Minister Boris Johnson behind protective glass during question period at the House of Commons in London, Britain April 28, 2021. UK Parliament/Jessica Taylor/Handout via REUTERS

LONDON (Reuters) – Britain’s main opposition Labour Party said it will push for a vote in parliament on Monday over support for U.S. plans to introduce a global minimum corporation tax rate.

The U.S. Treasury Department earlier this week said it would accept a floor of at least 15% during international negotiations, a rate significantly below its proposed 21% minimum for U.S. multinational firms.

The Biden administration’s proposed Global Intangible Low-Taxed Income tax (GILTI) rate of 21%, aimed at capturing revenue shifted by companies to tax-haven countries, was widely viewed as a starting point for renewed OECD talks on a global minimum tax.

While France and Germany backed 21%, other countries have pushed for a lower rate, as previous OECD discussions on the subject had centred around 12.5%, the same rate charged by Ireland.

Britain will raise its main corporation tax rate to 25% from 19% in 2023, finance minister Rishi Sunak announced earlier this year.

Labour is tabling an amendment to the Finance Bill.

“This global pact will bring in extra tax benefitting Britain, while stopping huge multinationals and online giants from undercutting our businesses,” said Labour finance spokeswoman Rachel Reeves.

Britain’s finance ministry has said reaching an international agreement on how large digital companies are taxed “is a priority” and that “we welcome the U.S.’ renewed commitment to tackling the issue and agree that minimum taxes might help to ensure businesses pay tax”.

“However, it also matters where the tax is paid and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities.”

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