Global Tax Deal Leaves US Exempt, Fueling Criticism from Transparency Groups
In a landmark agreement reached by nearly 150 countries, the Organisation for Economic Cooperation and Development (OECD) has finalized a plan to curb large multinational corporations' ability to shift profits to low-tax jurisdictions. However, in a shocking twist, the United States will be exempt from this deal.
Critics are pointing fingers at the Biden administration's predecessor, Donald Trump, who had criticized the 2021 OECD global tax deal, calling it "not applicable" to the US. The subsequent negotiations between the Trump administration and other G7 members resulted in the exclusion of large US-based multinational corporations from the proposed 15% global minimum tax.
The exemption has left many tax transparency groups incensed, arguing that nearly a decade of global progress on corporate taxation is being undone by the US's decision. "This deal risks nearly a decade of global progress on corporate taxation only to allow the largest, most profitable American companies to keep parking profits in tax havens," said Zorka Milin, policy director at the Fact Coalition.
The OECD secretary general, Mathias Cormann, described the agreement as a "landmark decision" that will enhance tax certainty and protect tax bases. However, his words ring hollow for those who see this move as a victory for corporate interests over transparency.
US Treasury Secretary Scott Bessent has framed the exemption as a necessary measure to preserve US sovereignty and protect American workers and businesses from what he calls "extraterritorial overreach." However, critics argue that this justification is weak, especially given the long history of international cooperation on tax issues.
The deal also waters down an earlier landmark agreement reached in 2021, which set a minimum global corporate tax rate of 15%. This move has been met with widespread criticism from tax watchdogs and transparency groups, who see it as a step backwards in the fight against base erosion and profit shifting (BEPS).
As the world watches this development, questions remain about the implications for US corporations and the broader global economy. Will the exclusion of the US from the global minimum tax have significant consequences for multinational businesses? And what does this mean for the future of international cooperation on taxation? Only time will tell.
In a landmark agreement reached by nearly 150 countries, the Organisation for Economic Cooperation and Development (OECD) has finalized a plan to curb large multinational corporations' ability to shift profits to low-tax jurisdictions. However, in a shocking twist, the United States will be exempt from this deal.
Critics are pointing fingers at the Biden administration's predecessor, Donald Trump, who had criticized the 2021 OECD global tax deal, calling it "not applicable" to the US. The subsequent negotiations between the Trump administration and other G7 members resulted in the exclusion of large US-based multinational corporations from the proposed 15% global minimum tax.
The exemption has left many tax transparency groups incensed, arguing that nearly a decade of global progress on corporate taxation is being undone by the US's decision. "This deal risks nearly a decade of global progress on corporate taxation only to allow the largest, most profitable American companies to keep parking profits in tax havens," said Zorka Milin, policy director at the Fact Coalition.
The OECD secretary general, Mathias Cormann, described the agreement as a "landmark decision" that will enhance tax certainty and protect tax bases. However, his words ring hollow for those who see this move as a victory for corporate interests over transparency.
US Treasury Secretary Scott Bessent has framed the exemption as a necessary measure to preserve US sovereignty and protect American workers and businesses from what he calls "extraterritorial overreach." However, critics argue that this justification is weak, especially given the long history of international cooperation on tax issues.
The deal also waters down an earlier landmark agreement reached in 2021, which set a minimum global corporate tax rate of 15%. This move has been met with widespread criticism from tax watchdogs and transparency groups, who see it as a step backwards in the fight against base erosion and profit shifting (BEPS).
As the world watches this development, questions remain about the implications for US corporations and the broader global economy. Will the exclusion of the US from the global minimum tax have significant consequences for multinational businesses? And what does this mean for the future of international cooperation on taxation? Only time will tell.
This is a big blow to transparency groups who've been pushing for a level playing field when it comes to corporate taxes 
The US always seems to find ways to carve out exceptions for its own corporations, and now they're getting away with being exempt from the global minimum tax 
It's like the rest of the world is just going to have to play by different rules while the US gets a free pass 
What's really going on here? Is it just about corporate interests or are there other factors at play? And what does this mean for small businesses and individuals who already bear the brunt of taxes? 
this whole thing just feels kinda shady to me. 
we need more international cooperation on taxation, not less. 
what's next? are they gonna make an exception for china too? 
it just doesn't seem fair to me. 
like the whole world is coming together to fight corporate tax evasion and the us just gets a free pass 
I'm not buying the whole "sovereignty" thing either bessent's argument sounds like weak sauce to me especially with how much the us benefits from playing with its tax laws on a global scale 
I don't get why they're exempt from this deal, it just doesn't sit right with me. It's like, we're trying to make a more fair system and suddenly the US is like "nope, we're good". And don't even get me started on the excuse about sovereignty... it sounds like a bunch of corporate lawyers making up stuff 
.
, but now it seems like they're just messing with the rest of the world while letting US corporations get off scot-free 
, but come on! Can't we just have a little international cooperation and agreement on taxes already? 
. It's like, what's the point of making these big deals if we're not gonna stick to them? The transparency groups are right, this is a step backwards in the fight against BEPS and it's going to be super problematic for multinational businesses 
. Will US corporations just continue to park their profits in tax havens? How will that impact other countries' economies? It's just, like, who knows what's gonna happen next 
.
, imo! I mean, who thought it was a good idea to let US corps keep dodging taxes like it's 2021 again? 
️, especially when they're the ones benefiting from these tax loopholes in the first place 
. We need more accountability and not so much corporate politicking 
... what's next? are we gonna let other countries do the same thing if they don't like the deal? 
It's like Trump's old phrase, but this time it's literally happening under Biden's watch 
. Anyway, who needs tax transparency when you've got corporate lobbying power, right? 
and do its own thing. It's all about corporate interests over transparency and fairness. I'm low-key disappointed that the world didn't get closer to having some decent global minimum tax rate. But hey, at least it'll make for some entertaining discussions in the future 
]
[GIF of a person trying to juggle too many balls, with some dropping on the ground]
. The world is getting smarter, and we're not buying what you're selling 
.