U.S. Secretary of the Treasury Scott Bessent announced that U.S.-headquartered companies will be exempt from the OECD Pillar Two global minimum tax plan, following an agreement reached with over 145 countries in the OECD/G20 Inclusive Framework.
The Biden Administration’s proposed OECD Pillar Two deal will not apply to U.S. multinationals, according to a statement released by Secretary Bessent. The announcement follows President Trump’s Day One Executive Orders, which stated that the proposal would have no force or effect for the United States.
“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,” Bessent said. “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 added that this agreement also protects incentives such as the U.S. R&D credit and other measures approved by Congress aimed at encouraging investment and job creation domestically. “Further, 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,” he said.
“This agreement represents a historic victory in preserving U.S. sovereignty and protecting American workers and businesses from extraterritorial overreach,” Bessent continued.
He also noted that Treasury will continue discussions with foreign governments to ensure implementation of this arrangement and to foster international tax stability, especially concerning digital economy taxation.
