By Ovunc Kutlu
ISTANBUL (AA) - The US Treasury Department released Thursday proposed rules for corporate alternative minimum tax to address tax avoidance by companies with $1 billion or more in annual profit.
The rules aim to increase tax fairness and address important tax avoidance by some of the largest and most profitable US corporations by implementing the Inflation Reduction Act’s Corporate Alternative Minimum Tax (CAMT), it said in a statement.
The Treasury Department said it estimates that around 100 of the largest and most profitable companies will pay the CAMT annually.
"These corporations would have otherwise paid an average effective federal tax rate of 2.6%. An estimated 60% of CAMT payers would otherwise have paid an effective tax rate of less than 1%, including 25% of payers that would have paid an effective tax rate of zero," it said.
The agency noted that some of the biggest and most profitable corporations in the US use tax preferences and aggressive planning strategies to pay little to no taxes.
The minimum tax rule is estimated to generate more than $250 billion from the most profitable companies over the next 10 years, and $20 billion in 2025.