"Double standards" US lowers proposed rate of global corporate taxation

Friday 21 May 2021

The United States has moderated its position on corporate taxation, days after Chief Minister John Le Fondré suggested that President Joe Biden should look “closer to home” before trying to introduce a minimum rate.

It has been reported that the US is now willing to accept a lower global minimum corporate tax rate of 15%, significantly less that the 21% that it first proposed for its multinational firms.

The country’s Treasury Department said that the new proposal was made during a meeting of the OECD tax steering group on base erosion and profit shifting on Thursday. 

Earlier this week, Express reported that Senator Le Fondré had told the i newspaper that “some people need to look closer to home before involving themselves in the tax policies of others.

Suggesting the US had double standards, he added: “Take Delaware, for example. Perhaps the US should look at states like Delaware before telling the rest of the world to do.”

Denying that Jersey was a tax haven, Senator Le Fondré said that the Island contributed £15 billion to the UK economy and supported £250,000 jobs there.

In a statement on its updated position, the US Treasury Department said: “Treasury underscores that 15% is a floor and that discussions should continue to be ambitious and push that rate higher.”

While France and Germany reportedly backed the 21% proposals, others have pushed for a lower 12.5% rate, the same charged by Ireland. 

The UK is understood to have withheld its support for the US proposal, but it has already said it intends to raise its corporation tax, currently at 19%, to 25% on profits over £250,000 in 2023 to replenish its public finances after its Covid response.  

The OECD talks are expected to conclude by a July meeting of G20 finance ministers. 

The Government of Jersey says it believes that there should be a “level playing field” for international tax standards.