Obama Said to Plan Tax Curbs on Global Corporate MovesRichard Rubin
The Obama administration plans to propose new limits on multinational companies’ ability to take advantage of gaps between countries’ tax rules, an administration official said.
The proposals would raise money for the U.S. government by making more profits subject to the corporate income tax.
They would limit transactions that are considered debt by one country and equity by another, which can result in neither country taxing the income. The proposals would also address some digital transactions designed to move profits to low-tax countries.
The administration official, who requested anonymity to describe the proposals because they haven’t been made public, said they are expected to be part of President Barack Obama’s budget plan on March 4. The proposals were reported earlier by the Wall Street Journal.
The proposals on digital transactions and so-called hybrid instruments are being added to prior administration ideas to keep companies from shifting profits from high-tax to low-tax countries, the official said.
The U.S. has the industrialized world’s highest statutory corporate tax rate, at 35 percent. A bipartisan agreement to lower that rate hasn’t advanced in Congress because of disagreements over the details and on what should happen to income taxes for individuals.