- OECD/G20 Global Tax Deal: In October 2021, over 130 countries, under the OECD/G20 Inclusive Framework, agreed on a two-pillar solution to establish a minimum corporate tax rate of 15% on excess profits of multinational corporations, particularly targeting large tech companies, as a response to the digital economy’s growth.
- U.S. Withdrawal and Scrutiny: President Trump withdrew the U.S. from the Global Tax Deal, deeming the GloBE Model Rules as unfavorable to U.S. tech giants. He ordered the U.S. Treasury to investigate jurisdictions enforcing these rules, particularly focusing on any unfair taxes imposed on U.S. digital enterprises.
- Potential U.S. Responses: The U.S. government is considering various measures against jurisdictions that implement discriminatory tax rules, which could include increasing import tariffs and income taxes on goods or services from those regions. This could lead to significant tensions between the U.S. and its trade partners as more countries adopt the OECD’s Pillar Two tax framework.
Source 1stopvat
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