US Congress negotiations over proposed corporate tax may take until autumn



Cliff Taylor | The Irish Times

Negotiations with the US Congress on corporate tax proposals put forward by the Biden administration will be complex and may take until the autumn to conclude, according to Barbara Angus, EY global tax leader. The US political system was still getting used to the changes introduced in 2017 as part of the Trump tax reform programme, and long discussions were likely to change the shape of the Biden proposal.

The US president has proposed an increase in the main US corporate tax rate from 21 per cent to 28 per cent. He has also proposed that a rate introduced on the global income of US companies under the Trump 2017 plan – the so-called GILTI rate – be reformed, and the rate increased from 10.5 per cent to 21 per cent .

Ms Angus,who is based in Washington, said that the wafer- thin Democratic majority in Congress – relying in the Senate on the vote of the vice-president Kamala Harris – meant compromise would be needed in whatever legislative process was used.

She pointed out that the proposed GILTI rate of 21 per cent was equivalent to 75 per cent of the proposed main corporate tax rate. There would be sensitivity, she said, about the gap in whatever deal emerged and not having a system which offered an incentive for US firms to invest overseas. 

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