4 ms·
> The treaty will need to be ratified via a two-thirds majority in the US Senate, which is unlikely given that it allows foreign countries to tax US companies,
by franciscop 5y ago
> The treaty will need to be ratified via a two-thirds majority in the US Senate, which is unlikely given that it allows foreign countries to tax US companies, the Eurasia Group analysts said. An alternative could be "another major tax bill," but the United States is unlikely to consider that until 2025, they added.
How is this possibly true? The vote that the US takes should not affect what a company (wherever it is from) is being charged by e.g. France while doing business in France, that'd be up to local laws, right? Passing it in the US should only allow the US to tax international companies there, but they'd not get a say in other country's taxes?
Unless I'm misunderstanding it and it's the international treaty itself that needs to be approved locally (does that even make sense, having been approved already?), and not local laws based on the treaty.
- Renaud 5y agoI think they mean that if a company in France manages to shuttle back its profits to the US, then it will need to be taxed 15% there as least. International corporations routinely avoid tax in one country by having charging large fees to the foreign entity for instance, leaving little local profit to be taxed.
- MichaelZuo 5y agoIn your example US and French companies in France would have to abide whatever rules are in France whereas US and French companies in the US would have to abide whatever rules are in the US. As it has always been. Any cross border treaty provisions, or provisions relying on multi party agreement will be ineffective in the case of the French-US relationship until both sides harmonize. Depending on how the treaty is structured it may be that none of the provisions can enter into force until all provisions are able to. And various other possible complications can change the dynamic too of course.