To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect of the global minimum corporate tax rate being proposed by the US Administration on low and middle income countries.
24 May 2021
The Government welcomes the US administration's renewed commitment to reaching a two-pillar solution reforming the international tax framework through the OECD, and it is optimistic that an agreement can be reached.
The OECD proposals to update the international tax framework have been under negotiation for a number of years and the UK has been at the forefront of these talks.
A global minimum tax (Pillar 2) is an important part of the package being developed by the OECD and the UK has been working with other countries on this initiative for a number of years.
The Government supports agreement on a global minimum tax. It is also crucial that this is agreed alongside changes to profit allocation rules (Pillar 1). Pillar 1 is vital to ensure large digital businesses pay more tax in the UK, commensurate with their economic activities.
The Chancellor has made supporting progress towards a two-pillar solution a priority of the UK’s G7 presidency. As such, he has regular discussions with his G7 counterparts on these issues.
Given that these discussions are still in progress and important details are still subject to international negotiation, it would not be appropriate for the Government to provide detailed impact assessments.