Thread by @alexcobham

As frustrated members made clear in 2020, the OECD Inclusive Framework does not make the decisions in the corporate tax negotiations they nominally lead, and nor even is it the G20 that gave the OECD the mandate - it is (still) the G7.

So where do they stand on Biden's 21% plan?

There are two important elements to this. First, do countries support a 21% minimum corporate tax rate? And second, do they support a fair distribution of the right to tax the undertaxed profits?

Starting with the US: safe to say, Biden administration supports Biden plan. That includes the 21% minimum rate; and at least opens the door to a distribution that doesn't give first bite at revenues to the headquarters country (hence GILTI/BEAT reforms). taxjustice.net/2021/04/08/300…

At the same time, there has been no explicit comment on the METR - which apportions undertaxed profits according to the location of multinationals' real economic activity (and so treats HQ and host countries equally): taxjustice.net/press/biden-ta…

Next up, Canada has just come out strongly in favour of the Biden plan - the 21% minimum, at least - but again, nothing I've seen on the distribution side. ft.com/content/9f2b2b…

Would @cafreeland support the METR? Per our analysis, a minimum tax rate of 21% with the METR it would bring Canada additional revenues of US$14.8 billion, as opposed to US$10.4bn under the OECD GloBE proposal. ies.fsv.cuni.cz/sci/publicatio…

Strong support for the 21% minimum rate from Japan also reuters.com/world/asia-pac…

Again, I haven't seen anything about Japan's position on the distribution of revenues; but again, Japan would do much better with a 21% rate under the METR proposal (US$79bn of additional revenues) rather than the OECD approach (US$60bn)

In the EU, France and Germany have indicated support, broadly, for the Biden intervention; but only really saying that they *wouldn't oppose* 21%. A step forward from France championing 12.5%, but still tepid at best. dw.com/en/france-and-…

Nothing on the distribution side; but Germany at least has been closely associated with the technical process to create the OECD proposal, so may well be opposed to the METR. Which is a pity, because Germany would also do better: $48bn vs $39bn (and France $28.5bn v $25.8bn).

Ultimately though, it seems unlikely that Germany or France would oppose the METR basis for the 21% minimum, if the US pushed it - and nor, perhaps would Italy which has been quite on the subject so far.

Which leaves the final G7 member, and the chair of the June summit: the UK. Under parliamentary questioning, the government has stopped short of giving any clear position - but there are three reasons, some better than others, why UK should make this central to their G7 agenda.

First, it's the right thing to do. The GloBE and METR proposals aren't too different for the UK (potentially $21bn in additional revenues at 21% from each); but the world does better from the METR, and only the METR gives lower-income the same kind of % gains as OECD members.

Second, this is the smart move. 'Global Britain' needs some friends, and this is what the Biden administration is looking for right now. The alternative - cementing a view of the UK as obstructive and leaning towards tax havenry - would be self-defeating.

And third, this particular UK government really needs a win, and fast. COP26 may provide hope at the end of the year - but it's not coming in June. The opportunity is for the UK G7 to be the pivot that seals an ambitious global minimum tax, bringing the EU states into agreement

...and if the UK is able to ensure a distribution of revenues that benefits countries globally, rather than leaving out lower-income countries (for no benefit to OECD members), it will rightly be seen as making a valuable contribution to the global fight against the pandemic.

UK govt update: mood music verily warming up.

@Jesse_Norman: "We have been a very strong advocate" & Chancellor @RishiSunak "feels strongly about the importance of our leadership of the G7 as a way of consolidating this progress in tax" hansard.parliament.uk/Commons/2021-0… h/t @GeorgeDibb

UK warming up continues:
@RishiSunak "receptive to US proposal for global minimum corporate tax rate to limit opportunity for multinationals to minimize tax bills by basing themselves in low-tax jurisdictions even if most activities elsewhere" ht @Ianpgary
wsj.com/articles/u-k-o…

But still: the UK refuses to offer support for the Biden administration's proposed rate of 21% for the global minimum corporate tax, despite massive public support and the huge revenue gains for UK: taxjustice.uk/blog/uk-would-…

While the UK government continues to resist supporting a 21% global corporate minimum tax rate, the UK public (and the political opposition) are very clear what leadership at the G7 would look like
theguardian.com/business/2021/…

More on the UK public's demand for their government to start supporting the Biden proposal for a 21% global minimum corporate tax rate

https://twitter.com/TaxJusticeUK/status/1390224529318875136?s=19