EU backs US global minimum tax proposal

30 April, 2021 12:00 AM printer

BRUSSELS: The European Parliament on Thursday welcomed a US proposal to introduce a 21 percent global minimum tax on corporations but said Europe should “go it alone” if the effort fails.

“Outdated international tax rules need to be overhauled, including a minimum effective corporate tax rate,” a statement said after the non-binding resolution was passed with a big majority, reports AFP.

The US proposal is intended to stop what Washington calls a “race to the bottom” among countries to see who can offer the lowest rate and would unwind a historic rate cut in the US under former president Donald Trump.

Crucially, it would not only affect US tech giants such as Google and Facebook, but also non-digital big businesses such as LVMH or Volkswagen, which are European.

The MEPs enthusiastically backed negotiations underway at the Organisation for Economic Co-operation and Development (OECD) to agree on the minimum tax, but insisted that the EU should propose its own version for Europe that targeted big tech if no breakthrough is reached this year.