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US Multinational Tax Reform Options: Taxation of US Multinationals

US Multinational Tax Reform Options: Taxation of US Multinationals
taxfoundation.org - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from taxfoundation.org Daily Mail and Mail on Sunday newspapers.

United States , Hong Kong , British Virgin Islands , Cayman Islands , Daniel Bunn , Ron Wydend Oregon , Ron Wyden , Sherrod Brownd Ohio , Stevet Dennis , Mihira Desai , Kari Jahnsen , Johnr Graham , Mark Warnerd Virginia , Tim Dowd , Jamesr Hines Jr , Kyle Pomerleau , Alexander Arnon , Terry Shevlin , Rachel Griffith , Sherrod Brown , Xiaoyue Sun , C Fritz Foley , Michelle Hanlon , Erik Wasson , Cody Kallen , Michael Overesch ,

The Taxman Cometh


For decades, the story of corporate taxation has been a global race to the bottom. From 1985 to 2018, the average corporate tax rate worldwide dropped from 49 percent to 24 percent. The biggest single jolt came in 2017, when U.S. President Donald Trump signed the Tax Cuts and Jobs Act, slashing the American rate from 35 percent to 21 percent while expanding the amount of foreign income exempted from tax.
Official tax rates are only part of the story. Corporations have made increasing use of exemptions, incentives, and loopholes especially offshore tax havens, where, worldwide, around 40 percent of their profits now end up. Budgets of the U.S. Internal Revenue Service (IRS) and of other national tax authorities have been slashed, and corporate audits are getting lighter: the U.S. Treasury now estimates that audit rates for large corporations fell from 98 percent in 2010 to 49 percent in 2018. In April, news emerged that at least 55 of the United States’ largest multinationals ....

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New patterns of profit shifting emerge from country-by-country data


Michael Devereux, Clemens Fuest, Ben Lockwood
The international taxation of multinational enterprises (MNEs) recently received renewed media and public opinion attention following the commitment by finance ministers of the G7 at their meeting in London on 4-5 June 2021 to a global minimum tax of at least 15% on a country-by-country basis. Negotiations on reforms of international corporate tax rules, including the introduction of a minimum level of taxation, have been ongoing at the OECD Inclusive Framework for a while (OECD 2020), but one of the main novelties of the G7 communiqué stands in the reference to a rate – at least 15% – at which multinationals should be taxed. A crucial political step would be reaching an agreement at the G20 level. ....

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