Yellen signs the US up for tax talks that may hit Ireland’s exchequer hard

Janet Yellen has called time on the Trump era's isolationism at the IMF meetings. Photo: Erin Scott/Bloomberg

Saleha Mohsin and Christopher Condon

April 06 2021 02:30 AM

US Treasury Secretary Janet Yellen outlined the case for a harmonised corporate tax rate across the world’s major economies, part of an effort to restore global leadership and credibility with US allies following the unilateralist approach of the Trump era.

In her first major speech on international economic policy, Ms Yellen marked an American return to the “global stage”.

“America first must never mean America alone,” she said yesterday in a conference ahead of the spring meetings of the International Monetary Fund and World Bank. “A lack of global leadership and engagement makes our institutions and economy vulnerable.”

Ms Yellen specifically criticised the strategy of the previous administration, decrying four years when the US “isolated ourselves and retreated from the international order that we created”.

The new multilateral approach begins with the US taking a leading role in working with Group of 20 nations to find an appropriate minimum corporate tax. Yellen wants to halt what she described as an international “race to the bottom” by countries competing to lure corporations with lower taxes.

Any US move to change the way big American multinationals are taxed could have implications for Ireland.

The US is involved in talks led by the Organization for Economic Cooperation and Development with about 140 countries to develop a global agreement on minimum levies, but participants haven’t yet reached a deal.

Ms Yellen is participating in her first round of meetings as Treasury secretary during the spring IMF and World Bank meetings.

Bloomberg