FRANKFURT, Germany (AP) – How can governments keep multinational companies from avoiding taxes by shifting their profits to low-tax countries?
For nearly a decade, nations have grappled with that question, seeking to deter companies from legally avoiding tax by resorting to so-called tax havens – typically small countries that entice companies with low or zero taxes, even though the firms do little actual business there.
International discussions over the issue gathered momentum after U.S. President Joe Biden proposed a global minimum corporate tax rate of at least 15% and possibly higher. The proposal has found support among other major economies such as France and Germany and has raised the prospect that a new approach to international taxation might be reached this year.
That, at least, is the goal set by the Organization for Economic Cooperation and Development in Paris, which is overseeing talks among more than 140 countries.
A possible endorsement of the minimum tax idea at the Group of Seven finance ministers’ meeting Friday and Saturday in London could add to momentum toward a deal.