Overview

• The agreement formalizes a carve-out for U.S.-headquartered companies from the OECD’s second pillar minimum tax agreed by over 140 countries in 2021.
• President Trump’s January executive orders on tax sovereignty guided U.S. negotiators to secure the exemption.
• The OECD–G20 Inclusive Framework must decide whether the exemption will take the form of a bespoke safeguard clause or recognition of the U.S. GILTI regime as equivalent.
• U.S. officials also agreed to drop Section 899, the so-called “revenge tax,” from a major Senate bill in exchange for the concession.
• EU member states and nations with standalone digital services taxes now face choices on whether to maintain or revise their levies.