France, Germany, and Italy announced on Friday that a fresh US proposal for a worldwide minimum corporation tax rate of at least 15% was a suitable foundation for reaching an international agreement by July.

On Thursday, the US Treasury Department agreed to consider a minimum rate of at least 15%, which is much lower than the planned minimum rate of 21% for US multinational corporations.

It made the idea at the Paris-based Organization for Economic Cooperation and Development (OECD), where almost 140 nations want to reach a broad agreement this summer to rewrite guidelines for taxing multinational corporations and large internet firms like Alphabet Inc and Facebook Inc.

Treasury advocated the steering committee that the worldwide minimum tax rate be at least 15%, as per a report from the department. “Treasury emphasized that 15 % is a baseline and that conversations should remain aspirational to push that number higher.” US Treasury Secretary Janet Yellen originally suggested a 21% US corporate minimum tax in April as part of President Joe Biden's $2.2 trillion infrastructure building plan that would be mostly funded by raising the US corporation tax rate to 28%.

In 2017, the Trump government and congressional Republicans reduced the corporation tax rate from 35% to 21%. Simultaneously, the Treasury introduced a 10.5 % minimum tax known as the Global Intangible Low-Taxed Income Tax (GILTI) to collect money transferred by corporations to tax-haven nations.

The Biden administration's suggested GILTI rate of 21% was widely seen as a beginning point for resumption of OECD discussion on a global minimum tax.

While France and Germany supported the 21 % tax other nations argued for a lower rate, with earlier OECD debates on the matter concentrating on 12.5 % of the amount levied by Ireland.

“The recent suggestion presented by the US may be a decent compromise,” said French Finance Minister Bruno Le Maire as he landed in Lisbon for meetings with eurozone peers.

His German colleague, Olaf Scholz, praised the latest US plan as “significant progress,” while EU Economics Commissioner Paolo Gentiloni, as did Italian Economy Minister Daniele Franco, saying it was a step toward a settlement.

At the discussion in Lisbon, two eurozone officials stated that the US offer would be well received by the rest of the European Union. “That 15% would be agreeable to all EU member states, even Luxembourg and Ireland,” one source added.

Britain, which is hosting an online gathering of finance ministers next week, is worried that the newest US plans need not tackle the issue of guaranteeing those massive multinational corporations, particularly digital firms, to pay higher taxes in nations where they generate income.

As per US Treasury officials, the Biden administration would continue to lobby for the maximum rate feasible above 15%, but the proposal does not change the planned US minimum tax of 21%.

The official stated that even at 15%, the gap between US and worldwide minimum rates will be significantly narrowed because now there is no global minimum tax.

“The 15% rate is more feasible given where many nations are,” said Manal Corwin, former Treasury official and head of KPMG's Washington National Tax practice.

“Most significantly, this indicates that the US is ready to accept a worldwide minimum tax that is way lower than the rate they are asking for GILTI,” she said. “I believe it was critical for obtaining a deal at the OECD that the US be prepared to settle to anything considerably below 21 %.  The Treasury Department suggested the worldwide minimum tax to reduce the effects of a higher US tax rate on American firms' competitiveness and dissuade them from transferring operations or earnings to lower-tax jurisdictions.

Separately, eurozone business expansion advanced at the strongest rate in more than three years in May, as per a poll released on Friday, but European Central Bank President Christine Lagarde warned an unsteady recovery still required emergency ECB support.

Following a poor start, the speed of vaccinations is ramping up, allowing certain limitations established to combat the spreading of the coronavirus to be removed, while a strong revival in the bloc's now-reopening service economy has contributed to the push from the thriving manufacturing industry.

As the economy recovers and confidence rises, certain policymakers argue that the ECB should abandon its emergency initiatives and return to more traditional kinds of stimulus.

Others are far more cautious, noting that the fledgling rebound is dependent on enough ECB backing and that the recent jump in borrowing costs to two-year peak levels is a significant drag.