Global Daily Tax News, Lawmakers Seek Implementation Of US Corporate Minimum Tax, (Jul 15, 2024)
In a recent letter to US Treasury Secretary Janet Yellen, four US lawmakers, led by Elizabeth Warren (D-MA), have called on the Treasury to issue regulations to enable implementation of the US 15-percent corporate alternative minimum tax.
The CAMT was approved by lawmakers and signed into law with the passage of the Inflation Reduction Act (IRA). The letter states, however, "the Treasury Department has a critical role to play in the implementation of the CAMT", with the lawmakers calling for "strong and timely rules".
The lawmakers said CAMT, when implemented, will raise USD220bn in additional taxes from the US's largest corporations.
In their letter, the lawmakers noted: "In the five years following the Trump tax cuts, 55 of the biggest corporations reported nearly USD670bn in profits to their shareholders but paid less than five percent of those profits in taxes."
"The CAMT represents a historic step to address corporate tax evaders, requiring that when companies report over USD1bn in profits to their shareholders, they must pay at least 15 percent of those profits in taxes."
"But in order to fully realize the gains from the CAMT, the Treasury Department and Internal Revenue Service (IRS) must act quickly to issue key rules."
They noted, to date, the Treasury Department and IRS have issued some preliminary guidance on how to calculate a corporations' "adjusted financial statement income", (AFSI) and what factors should be considered in doing so. "However, Treasury and the IRS have yet to release the proposed regulations that will resolve some of the outstanding considerations, having previously indicated that rules would be released in early 2024."
The letter concludes: "We urge you to quickly issue strong regulations to implement the corporate minimum tax to ensure that the largest corporations begin to pay their fair share and respectfully request that you promptly brief our staff on the status of your work."