German Finance Chief Sees Global Corporate-Tax Deal by Summer

German Finance Minister Olaf Scholz said a global deal on minimum corporate taxes is possible within months, citing signals of support by President Joe Biden’s administration.

“I’m convinced we’ll finish up a global minimum tax on corporate profits this summer,” Scholz, the Social Democratic Party’s candidate for chancellor in Germany’s September election, told Funke Media Group in an interview. “The American administration is on board with it now.”

The Biden administration has proposed that the U.S. apply a 21% global minimum rate, leading to speculation that it would push for a high rate in international talks under way at the Organization for Economic Cooperation and Development. However, some European Union countries have voiced concern.

Biden’s proposal is part of an infrastructure and tax plan he unveiled on March 31. In a speech to Congress on Wednesday, Biden pledged to “reform corporate taxes so they pay their fair share.”

A Treasury summary published in April cites the goal of ending an international “race to the bottom” on corporate tax. Biden’s plan would spur “other large economies to join the United States in taking the first step to adopt strong minimum taxes on corporations and leveling the playing field between the taxation of domestic and foreign corporations,” according to the Treasury.

Scholz called for Germany to extend a government-backed wage support program though the end of the year to help mitigate the Covid-19 pandemic’s fallout. Germany will return to fulfilling European financial stability criteria toward the end of the decade without requiring tough austerity measures, he said.

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