OECD Details Side‑by‑Side Global Minimum Tax Framework for U.S. Multinationals

Overview

• Published on January 5, the OECD package creates elective side‑by‑side and related safe harbors that switch off IIR and UTPR for eligible U.S.-parented groups.
• As of early January, the OECD’s central record lists only the United States as qualifying for the side‑by‑side safe harbor, with practical effects dependent on domestic adoption.
• Certain nonrefundable U.S. incentives, including the research and experimentation credit, will no longer trigger Pillar Two top‑up tax under the new design.
• Foreign Qualified Domestic Minimum Top‑Up Taxes would still apply first to U.S. groups’ overseas earnings and would generate foreign tax credits that reduce U.S. liability.
• U.S. multinationals remain subject to domestic minimum-tax regimes such as CAMT, NCTI on foreign income, and BEAT, and they still face compliance steps like filing a Pillar Two information return and calculating jurisdiction‑by‑jurisdiction QDMTTs.