U.S. Treasury Secretary Janet Yellen announced to an online gathering of G20 financial officials on Friday that the United States was dropping its opposition to a global tax concept that could result in levies against large international tech companies like Amazon, Alphabet’s Google and Facebook.
The proposal has been suggested under the auspices of the Paris-headquartered Organization for Economic Cooperation and Development (OECD), but was blocked by the Trump administration which insisted on a ”safe harbor” for the major U.S. tech firms.
”Secretary Yellen announced that we will engage robustly to address both Pillars of the OECD project, and that the United States is no longer advocating for’safe harbor’ implementation of Pillar 1,” a U.S. Treasury official said.
European officials praised the move.
”My U.S. colleague Janet Yellen told G20 finance ministers today that the United States would participate, and that the new regulations for fair international taxation should be binding for all companies,” German Finance Minister Olaf Scholz said.
”This is a giant step forward on our way to an agreement among the participating countries by the summer.”
The OECD estimates that minimum and digital tax reforms together would boost tax revenues by between $60 billion to $100 billion, or 4% of global corporate income tax.
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