Global deal aimed at ending tax havens is gaining momentum

Global deal aimed at ending tax havens is gaining momentum

People familiar with the negotiations said that while the 15 percent tariff was essentially an inevitable outcome, some of the world’s largest nations continued to struggle for concessions over their impact on long-standing economic models that helped attract investment and create jobs.

“I am absolutely determined to pave the way for consensus because we are one millimeter away from a global agreement on a new international tax regime for the 21st century,” French Finance Minister Bruno Le Maire told CNBC on Wednesday. “Of course there are some member states that are asking for a deferment and asking for an implementation period and a transition period. We are completely open to these kinds of proposals.”

Despite growing support for the agreement, concerns remain about how it will be implemented and whether it will be applied uniformly globally.

India, China, Estonia and Poland said the minimum tax could harm their ability to attract investment through special incentives such as research and development credits and special economic zones that offer tax breaks to investors. For example, China has long used special economic zones with low tax rates to attract foreign investment, which has been a boon to its economic development.

The United States has been one of the most vocal supporters of the deal, but it also faces challenges in ensuring that the Biden administration’s commitments are implemented by Congress. Biden’s economic agenda is in limbo, and Democrats are trying to figure out how to make changes to the tax code to ensure the United States abides by the international agreement they’re trying to make.

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The Treasury declined to comment on the details of the agreement, noting that negotiations are still ongoing, but it expressed optimism that the deal would be completed when G20 leaders meet in Rome later this month.

Alexandra Lamana, a Treasury spokeswoman, said Treasury Secretary Janet L. Yellen is “focusing on progress in concluding a landmark deal, and expects countries to unite around the final parameters of a new international tax regime.” She added that the deal will help create more jobs and investment in the United States and benefit workers.

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