Corporate Taxes Poised to Rise After 136-Country Deal

 
1

Nearly 140 countries agreed Friday to the most sweeping overhaul of global tax rules in a century, a move that aims to curtail tax avoidance by multinational corporations and raise additional tax revenue of as much as $150 billion annually.

But the accord, which is a decade in the making, now must be implemented by the signatories, a path that is likely to be far from smooth, including in a closely divided U.S. Congress.

The reform sets out a global minimum corporate tax of 15%, targeted at preventing companies from exploiting low-tax jurisdictions.

Treasury Secretary Janet Yellen said the floor set by the global minimum tax was a victory for the U.S. and its ability to raise money from companies. She urged Congress to move swiftly to enact the international tax proposals it has been debating, which would help pay for extending the expanded child tax credit and climate-change initiatives, among other policies.

“International tax policy making is a complex issue, but the arcane language of today’s agreement belies how simple and sweeping the stakes are: when this deal is enacted, Americans will find the global economy a much easier place to land a job, earn a living, or scale a business,” Ms. Yellen said.

The agreement among 136 countries also seeks to address the challenges posed by companies, particularly technology giants, that register the intellectual property that drives their profits anywhere in the world. As a result, many of those countries established operations in low-tax countries such as Ireland to reduce their tax bills.

The final deal gained the backing of Ireland, Estonia and Hungary, three members of the European Union that withheld their support for a preliminary agreement in July. But Nigeria, Kenya, Sri Lanka and Pakistan continued to reject the deal.

The new agreement, if implemented, would divide existing tax revenues in a way that favors countries where customers are based. The biggest countries, as well as the low-tax jurisdictions, must implement the agreement in order for it to meaningfully reduce tax avoidance.

Overall, the OECD estimates the new rules could give governments around the world additional revenue of $150 billion annually.

The final deal is expected to receive the backing of leaders from the Group of 20 leading economies when they meet in Rome at the end of this month. Thereafter, the signatories will have to change their national laws and amend international treaties to put the overhaul into practice.

The signatories set 2023 as a target for implementation, which tax experts said was an ambitious goal. And while the agreement would likely survive the failure of a small economy to pass new laws, it would be greatly weakened if a large economy—such as the U.S.—were to fail.

“We are all relying on all the bigger countries being able to move at roughly the same pace together,” said Irish Finance Minister Paschal Donohoe. “Were any big economy not to find itself in a position to implement the agreement,  that would matter for the other countries. But that might not become apparent for a while.”

 

Congress’ work on the deal will be divided into two phases. The first, this year, will be to change the minimum tax on U.S. companies’ foreign income that the U.S. approved in 2017. To comply with the agreement, Democrats intend to raise the rate—the House plan calls for 16.6%—and implement it on a country-by-country basis. Democrats can advance this on their own and they are trying to do so as part of President Biden’s broader policy agenda.

The second phase will be trickier, and the timing is less certain. That is where the U.S. would have to agree to the international deal changing the rules for where income is taxed. Many analysts say that would require a treaty, which would need a two-thirds vote in the Senate and thus some support from Republicans. Ms. Yellen has been more circumspect about the schedule and procedural details of the second phase.

Friction between European countries and the U.S. over the taxation of U.S. tech giants has threatened to trigger a trade war.

In long-running talks about new international tax rules, European officials have argued U.S. tech giants should pay more tax in Europe, and they fought for a system that would reallocate taxing rights on some digital products from countries where the product is produced to where it is consumed.

The U.S., however, resisted. A number of European governments introduced their own taxes on digital services. The U.S. then threatened to respond with new tariffs on imports from Europe.

The compromise was to reallocate taxing rights on all big companies that are above a certain profit threshold.

Under the agreement reached Friday, governments pledged not to introduce any new levies and said they would ultimately withdraw any that are in place. But the timetable for doing that has yet to be settled through bilateral discussions between the U.S. and those countries that have introduced the new levies.

Even though they will likely have to pay more tax after the overhaul, technology companies have long backed efforts to secure an international agreement, which they see as a way to avoid a chaotic network of national levies that threatened to tax the same profit multiple times.

SHARE YOUR THOUGHTS

Do you agree with the global minimum tax on corporations? Why or why not? Join the conversation below.

The Organization for Economic Cooperation and Development, which has been guiding the tax talks, estimates that some $125 billion in existing tax revenues would be divided among countries in a new way.

Those new rules would be applied to companies with global turnover of €20 billion (about $23 billion) or more, and with a profit margin of 10% or more. That group is likely to include around 100 companies. Governments have agreed to reallocate the taxing rights to a quarter of the profits of each of those companies above 10%.

The agreement announced Friday specifies that its revenue and profitability thresholds for reallocating taxing rights could also apply to a part of a larger company if that segment is reported in its financial accounts. Such a provision would apply to Amazon.com Inc.’s cloud division, Amazon Web Services, even though Amazon as a whole isn’t profitable enough to qualify because of its low-margin e-commerce business.

The other part of the agreement sets a minimum tax rate of 15% on the profits made by large companies. Smaller companies, with revenues of less than $750 million, are exempted because they don’t typically have international operations and can’t therefore take advantage of the loopholes that big multinational companies have benefited from.

Low-tax countries such as Ireland will see an overall decline in revenues. Developing countries are least happy with the final deal, having pushed for both a higher minimum tax rate and the reallocation of a greater share of the profits of the largest companies.

 
.
 
 
 
 

quintex-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1Related Contents:

 

 

 
 
 
 

How Does EMDR Treat Trauma? Psychologists Explain

1

Eye Movement Desensitization and Reprocessing (EMDR) therapy was developed in the 1980s to help people with post-traumatic stress disorder (PTSD). Since then, use of the treatment has grown—and so has the evidence behind it. Nancy J. Smyth, Ph.D., a dean and professor at the University at Buffalo School of Social Work, uses EMDR with patients coping with trauma; here, she explains how it works.

What is EMDR, and why does it help with PTSD?

Smyth: Trauma can overwhelm our minds’ natural information processing system, leaving the memory stuck as though the experience is still happening. When people have PTSD, rather than remembering the trauma, recognizing that it was disturbing, and knowing that it’s over, they can feel as if they’re reliving it. EMDR is a type of psychotherapy in which a therapist uses bilateral dual attention stimulation (such as side-to-side eye movements) to help change the way memories are stored.

What happens during EMDR treatment?

Smyth: First, you’ll talk to your therapist about the reason you’re seeking out therapy and about events in your past that have been distressing for you. Next, you’ll do preparation, during which your therapist will see if you have the skills and tools you’ll need to cope with difficult emotions. If you don’t, they will help you learn them (possibly using other types of therapy). Then the therapist will ask questions to make sure you’re both on the same page about the target of treatment.

During treatment, the therapist will prompt you to start by focusing on a traumatic memory as you follow their fingers or an object as it moves from side to side. (Sometimes sounds on the sides of the body—the “bilateral” part of the stimulation—are used instead.) Throughout this, your therapist will ask you to notice thoughts, feelings, or sensations you’re experiencing. They won’t do a lot of talking, but will ask questions like “What comes up now?” The idea is that the bilateral stimulation activates the body’s natural adaptive information processing system in a safe environment, letting you stay in the present moment as you’re simultaneously remembering a distressing experience so your mind can reprocess that memory as a neutral one.

Is there evidence that it works?

Smyth: Yes, research indicates that compared with other types of therapy, like trauma-focused cognitive behavioral therapy or prolonged exposure, EMDR is just as effective for addressing PTSD or perhaps more so.

How quickly does it work?

Smyth: It varies. If you have healthy coping skills for managing stressors, the prep phase of treatment may be shorter.
If you’re seeking treatment for an isolated traumatic experience, the history-taking and stimulation parts of treatment may be shorter than if you’ve experienced a lot of trauma. Typically, the process takes at least three to 12 sessions.

How can I find a provider?

Smyth: You’ll want a licensed mental health professional who is trained in EMDR. The EMDR International Association is the major professional organization that certifies therapists; you can search the group’s directory at emdria.org.

Is this the same therapy Mel B used?

Yes, in 2018, the Spice Girls singer (whose full name is Melanie Brown) told British tabloid The Sun that she was checking herself into rehab for alcohol and sex issues and undergoing treatment for post-traumatic stress disorder. Brown revealed that working on her book, Brutally Honest, surfaced “massive issues” that she suppressed following her divorce from film producer Stephan Belafonte, whom she has claimed physically and emotionally abused her for years. The singer told The Sun she was diagnosed with PTSD and had begun EMDR. “After trying many different therapies, I started a course of therapy called EMDR, which in a nutshell works on the memory to deal with some of the very painful and traumatic situations I have been through,” said Brown. “I don’t want to jinx it, but so far it’s really helping me,” she said. “If I can shine a light on the issue of pain, PTSD and the things men and women do to mask it, I will.”

As an addiction and relationship therapist, Paul Hokemeyer, Ph.D., a psychotherapist based in New York City and Telluride, Colorado, says he recommends EMDR frequently. “Its success, however, depends of the integrity of the therapeutic relationship the patient has with the clinician providing the actual EMDR treatment and me, the primary therapist making the referral,” he says. “This heightened level of care is essential because EMDR requires the patient to reprocess their original trauma.” If you have symptoms of PTSD and are not yet seeking treatment, the U.S. Department of Veterans Affairs provides a PTSD Treatment Decision Aid to help you learn more about the various treatment options. You can use this as a jump-off point to start the conversation with your mental health provider.

By: and

Source: https://www.prevention.com

.

genesis-1-1-1-1-1-1-1-1-1-1-1-1-1-1-1

Related Contents:

 

%d bloggers like this: