WASHINGTON, Sept 12 (Reuters) – The U.S. Treasury Department on Thursday released new proposed rules for a new corporate alternative minimum tax. The tax is expected to generate $250 billion in U.S. revenue over 10 years from about 100 large corporations, which currently pay an average tax rate of just 2.6%. %.
The tax would apply to companies with average annual adjusted financial statement profits of $1 billion or more, the Treasury Department said in a statement. These companies often use income deductions and other strategies to minimize, or in some cases eliminate, their net income and federal income taxes.
Treasury officials declined to identify the 100 companies likely to be subject to the tax, but the average effective tax rate is currently estimated at 2.6% after deductions and deductions, with about 60 companies paying less than 1%. He added that the company pays a tax rate of .
The new tax was approved as part of the Control Inflation Act of 2022 to offset the cost of hundreds of billions of dollars worth of new clean energy tax credits.
“Today’s proposed rules announced by the Treasury Department will address America’s most egregious corporate tax avoidance and ensure that the nation’s largest and most profitable companies pay almost no taxes,” said Treasury Secretary Janet Yellen. “This is an important step toward realizing this initiative.” said in a statement.
He said the new tax would help level the playing field for small businesses that don’t have access to expensive tax lawyers and advisors to develop complex tax reduction strategies.
Officials said the rules published in the Federal Register on Thursday further clarify the limits on deductions that can be applied to determine adjusted financial statement income and tax liability.
While there is a general requirement that companies that meet the $1 billion in profits threshold pay the 15% alternative minimum tax, more specific clarifications included in Thursday’s proposed rule would apply to the 2024 tax year. Finance officials said.
The Treasury Department announced that it will accept public comments on the proposed rule until December 12, 2025, including requests to speak at a public hearing on January 16, 2025.
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Report by David Lawder. Editing: Chizu Nomiyama
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