WASHINGTON (Reuters) – The U.S. Treasury on Thursday introduced new proposed guidelines for a brand new company various minimal tax that’s anticipated to generate $250 billion in U.S. revenues over 10 years from about 100 massive corporations now paying a mean price of simply 2.6%.
The Treasury mentioned in an announcement that the tax would apply to corporations with annual common adjusted monetary assertion earnings of $1 billion or extra. These corporations usually use earnings deductions and different methods to attenuate their internet earnings and federal earnings tax, in some instances to zero.
Treasury officers declined to determine the 100 corporations that seemingly can be topic to the tax, however added that they’re now estimated to pay a mean efficient tax price of two.6% after deductions and credit, with about 60 paying lower than 1%.
The brand new tax was authorised as a part of the 2022 Inflation Discount Act to assist offset the price of a whole bunch of billions of {dollars} value of latest clear power tax credit.
“The proposed guidelines launched by Treasury immediately are an necessary step towards realizing Congress’ efforts to handle essentially the most egregious U.S. company tax avoidance and make sure the largest and most worthwhile companies within the nation can not pay little to no taxes,” U.S. Treasury Secretary Janet Yellen mentioned in an announcement.
She mentioned the brand new tax would assist stage the taking part in subject for small companies, who should not have entry to costly tax legal professionals and advisers to plan difficult tax discount methods.
The principles revealed within the Federal Register on Thursday present further readability on limitations for deductions that may be utilized to figuring out adjusted monetary assertion earnings and tax legal responsibility, officers mentioned.
Though there’s a common requirement for corporations assembly the $1 billion revenue threshold to pay the 15% various minimal tax, the extra particular clarifications contained in Thursday’s proposed guidelines would apply to the 2024 tax yr, Treasury officers mentioned.
The Treasury mentioned it should settle for public feedback on the proposed guidelines on till Dec. 12, together with requests to talk at a listening to on Jan 16, 2025.
(Reporting by David Lawder; Enhancing by Chizu Nomiyama)
