U.S.-Headquartered Companies Exempted from Biden Global Tax Plan
The U.S. Treasury has secured an agreement to exempt U.S.-headquartered companies from the American former President Joe Biden’s global tax plan.
The OECD announced that nearly 150 countries have agreed on the plan, initially crafted in 2021, to stop large global companies from shifting profits to low-tax countries, no matter where they operate in the world.
The amended version excludes large U.S.-based multinational corporations from the 15% global minimum tax after negotiations between President Donald Trump’s administration and other members of the Group of Seven wealthy nations.
In a statement, U.S. Secretary of the Treasury Scott Bessent issued the following statement on the non-applicability of OECD Pillar Two to U.S. multinationals.
He stated that President Trump’s Day One Executive Orders made clear that the Biden Administration’s proposed OECD Pillar Two deal would have no force or effect for the United States.
“Today, the Administration delivered on that promise. In close coordination with Congress, Treasury worked to reach agreement with the more than 145 countries in the OECD/G20 Inclusive Framework to have U.S.-headquartered companies remain subject to only U.S. global minimum taxes while exempting them from Pillar Two.
“This side-by-side agreement recognizes the tax sovereignty of the United States over the worldwide operations of U.S companies and the tax sovereignty of other countries over business activity within their own borders”, Bessent said.
The agreement protects the value of the U.S. R&D credit and other Congressionally approved incentives for investment and job creation in the United States, fulfilling the shared goal of U.S. leadership in innovation and technological advancement.
Bessent explained that this agreement represents a historic victory in preserving U.S. sovereignty and protecting American workers and businesses from extraterritorial overreach.
He said Treasury will continue engaging with foreign countries to ensure full implementation of the agreement, build greater international tax stability, and move toward a constructive dialogue on the taxation of the digital economy. First Holdco Declines by 8% to N2.043trn after Re-Rating
