Global Minimum Tax Takes Another Step Forward
Earlier this month, voters in Switzerland overwhelmingly approved a global minimum tax sought by the Organization for Economic Cooperation and Development (OECD) that would subject the largest international companies to a 15 percent minimum tax.
The governments of South Korea, Japan, the European Union, and the United Kingdom also are moving ahead with tax, which is on track to be implemented in 2024.
As The Wall Street Journal explained last week, once the tax is implemented next year, U.S.-based multinational companies will start paying higher taxes in foreign countries and, in 2026, U.S. companies will lose domestic tax breaks. As The Journal noted, the United States has not ratified the deal and Congress is unlikely to do anything until after the 2024 elections.
The tax will have an effect of the U.S. government as well. According to a new analysis from the Joint Committee on Taxation (JCT), the tax would result in fewer federal corporate tax receipts by as much as $122 billion over ten years. Read more here.