Great Britain

Joe Biden wants minimum world corporation tax rate of 21% – but could cripple Ireland

Budget 2021: Rishi Sunak announces 25% corporation tax rise

The proposed reforms of the global tax system from Mr Biden's administration would provide countries with taxing rights over the profits of US tech giants, which would be in addition to a new minimum corporation tax. These radical plans could stop the likes of Google, Amazon, Facebook and Apple moving their profits from where they process sales to tax havens around the world. The minimum global corporation tax, which the US has proposed would be 21 percent, would prop up the plans.

But under these plans, countries such as Ireland, the Netherlands and Luxembourg would be hit hard as profits moved from the UK to low tax jurisdictions would be taxed at the new minimum rate.

Brexiteer Sir John Redwood warned the Irish corporation tax rate could nearly double, and said the proposal "could have quite an impact on investment flows".

He tweeted: "Joe Biden's proposal for a minimum world corporation tax rate of 21 percent would mean a near doubling of the Irish rate of 12.5 percent.

"I assume the EU supports this as a way to a more level playing field.

joe biden

Joe Biden has proposed radical global corporation tax plans (Image: GETTY)

joe biden corporation tax

Joe Biden is looking to clamp down on a number of major tech companies (Image: GETTY)

"Could have quite an impact on investment flows."

But campaigners have claimed the global minimum corporation tax from Mr Biden and his Government would raise at least £13.5billion a year in Britain.

Tax Pressure UK calculated that a global tax rate of 20 percent would raise the huge amount for the UK exchequer while increasing the rate to 15 percent would raise more than £8billion.

Robert Palmer, executive director of Tax Justice UK, said: “A new minimum corporate tax rate would bring in billions of pounds to support public services and would deal a blow to tax dodging.”

READ MORE: AstraZeneca blanks EU letter about vaccine complaints

john redwood twitter

Sir John Redwood warned the proposals from Joe Biden could hit Ireland hard (Image: @johnredwood / Twitter)

The UK Treasury has thrown its support behind the plan from Mr Biden's Administration.

They would follow the announcement from Chancellor Rishi Sunak to increase corporation tax from 19 percent to 25 percent from 2023.

A Treasury spokesman said: “Updating the international tax rules to ensure that digital businesses pay more tax in the UK, in line with their economic activities, remains a UK priority, and we will work openly and constructively with international partners to develop a consensus-based solution.”

Last week, US Treasury Secretary Janet Yellen said the Internal Revenue Service (IRS) budget would increase by 10.4 percent under President Biden's fiscal 2022 budget request.

BBC removes online Prince Philip form as complaints hit peak [REPORT]
Putin is eyeing up much bigger prize than Donbas conquest in Ukraine [COMMENT]
Melania Trump blasted over Prince Philip tribute tweet–'Be respectful' [REACTION]

rishi sunak corporation tax

Rishi Sunak increased corporation tax from 19 percent to 25 percent from 2023 (Image: GETTY)

joe biden cabinet

Joe Biden's Cabinet (Image: EXPRESS)

In a statement, Ms Yellen said the total IRS budget of $13.2billion would also include an additional $900 million for tax enforcement in the 2022 financial year.

The Treasury is looking to ramp up revenues by reducing the "tax gap,".

This is the difference between taxes legally owed and those collected.

Ms Yellen insisted the budget request will increase fairness in the tax system.

She said: "It will make paying taxes a more seamless process for millions of Americans.

"And it makes sure that corporations actually pay what they owe."

Football news:

Chelsea extended their unbeaten streak to 7 matches. Next - the game with Arsenal
Raheem Sterling: I had an obvious penalty. I do not know why it was not set
Real Madrid have a chance to become the leader of La Liga-thanks to Barca's perfect zeros with Atletico Madrid
Thomas Tuchel: If City had scored a penalty , there would have been no chance of a comeback. Shocked by Chelsea's reaction
Busquets was diagnosed with a fractured upper jaw
Tuchel has two consecutive wins over Guardiola. Champions League Final - May 29
Arsenal did not make the top 4 of the Premier League for the fifth year in a row. The last time the club was in the top four was under Wenger