US Treasury Secretary Yellen's Efforts to Salvage Global Corporate Tax Deal
US Treasury Secretary Janet Yellen is actively engaged in negotiations to salvage a part of the global corporate tax deal focused on highly profitable multinational firms. However, India's refusal to engage on issues important to US interests poses a significant challenge.
Yellen also expressed concerns about China's absence in the negotiations. Despite these obstacles, she remains committed to finding a solution before the end-of-June deadline.
The Pillar 1 negotiations aim to reallocate taxing rights on US-based digital giants, allowing approximately $200 billion of corporate profits to be taxed in the countries where the companies operate.
transfer pricing and the "Amount B" system for simplifying transfer pricing calculations. While most countries support the US position, India's lack of engagement remains a major hurdle.
A failure to reach an agreement could lead to the return of digital services taxes in some countries, potentially reigniting trade tensions. To avoid this scenario, Italy seeks an agreement with the US that would prevent tariffs while allowing them to maintain their digital tax levy.