U.S. News & World Report recently interviewed Culhane Meadows’ New York partner Robert Kiggins to discuss the proposed global minimum corporate tax rate.
Here are some excerpts from Robert’s interview:
From June 11-13 in Cornwall, England, leaders from the G-7 group of industrialized nations affirmed a proposal to rewrite international tax rules for multinational corporations.
While still in its infancy, the U.S. Treasury Department, President Joe Biden’s administration and many European nations have come together around a preliminary deal to enact a global minimum corporate tax rate of 15%.
It’s always important to keep numbers in context. Ireland’s corporate tax rate is only 2.5 percentage points lower than the global minimum. Hundreds of sovereign and independent countries must coordinate tax strategy. And, altogether, analysis from the University of California, Berkeley suggests these efforts could raise an additional $60.8 billion in revenue for the U.S., or 28% of current tax revenue.
Attorney Robert Kiggins, the tax practice chair at Culhane Meadows, notes that investment funds, pensions, government entities, international organizations and nonprofits will not be affected, but it all depends on how terms will be defined.
As the plan passes through the legislative process, expect lobbyists from firms and industry groups to influence the bill and carve out exemptions for their clients.
According to Severino, “This proposal seems like more bark than bite, but we will have to see how it unfolds.”
Kiggins emphasizes that these firms will be especially well-advised and move quickly to remain compliant and savvy. Importantly, Mossina says that taxes and regulations respond to broad industry trends and practices, which companies themselves remain largely in control of.
At the end of the day, investors should know that the race to the bottom has now become a slow hike back up. Barton believes that the talks should serve as a warning to all companies that “taxes are going up.”
The complete article can be found here.
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