US Treasury Secretary Janet Yellen has found a new weapon in the fight against offshore companies and tax evasion with their help writes the Financial Times. She suggested that all countries of the world should introduce a minimum tax on the profits of multinational corporations.
Such a measure, according to Yellen, will make meaningless the race of states and jurisdictions for more favorable and attractive conditions for foreign companies. Currently, many of them (not all of them are offshore) have minimal or no income taxes.
This allows companies to register in such countries and provide them with income by paying for the services of local lawyers and registration authorities, as well as avoid paying tax until the profits are repatriated to their home country вЂ” the country of registration of the head office.
In addition, many of these companies serve as holding structures designed to hold shares in firms in the country of initial registration and receive dividends and interest on obligations from them. This is possible due to the fact that many countries with preferential regimes have concluded international agreements on the avoidance of double taxation, which allows you to significantly reduce the rate on the withdrawal of capital abroad.
Yellen's announcement came days after the announcement of President Joe Biden's massive plan to restore the national economy, which provides for the allocation of $1.9 trillion to citizens, companies, and banks. In this regard, the US authorities are looking for new ways to replenish the budget.