Companies are making the case they shouldn’t face new rules and standards to comply with a global minimum tax plan.
Business groups are asking the OECD to mark the existing U.S. global minimum tax rules as compliant with its own proposal, and let companies use existing financial accounting methods to calculate their tax rate.
The Organization for Economic Cooperation and Development is working to overhaul the global rules and agreements that determine where and how much multinationals are taxed. Part of the project would ensure companies pay at least a minimum rate in some jurisdictions, with anti-base erosion rules to prevent abuse.
The U.S. introduced a similar rule in its 2017 tax overhaul, a 10.5% tax on global intangible low-taxed income—income not subject to at least 13.125% tax elsewhere. GILTI “should be grandfathered” as a compliant regime in the new OECD rules, the U.S. Chamber of Commerce wrote in a Dec. 2 letter to the OECD.
Layering another set of rules on top of those companies would be “onerous,” the U.S. Council for International Business said in its own letter.
The OECD should also let companies keep the financial accounting standards they already use to calculate their effective tax rates for purposes of the tax, the Information Technology Industry Council said in a letter.
The OECD will hold a public consultation Dec. 9 on the proposal. At a consultation in November, representatives of businesses, industry groups, and civil society discussed the other half of the OECD plan, a proposal to reallocate more corporate profits to the countries where companies have consumers and users.