US Exempt From Global Tax Deal Targeting Multinational Profits Amid Criticism from Tax Transparency Groups
A landmark agreement reached by nearly 150 countries aims to curb multinational corporations from shifting profits to low-tax jurisdictions. However, the US has been exempted from the deal, sparking outrage among tax transparency groups. The Organisation for Economic Cooperation and Development (OECD), led by Secretary General Mathias Cormann, described the agreement as a "landmark decision in international tax cooperation." It is expected to enhance tax certainty, reduce complexity, and protect tax bases.
In contrast, US Treasury Secretary Scott Bessent hailed the deal as a "historic victory" that preserves American sovereignty and protects workers and businesses from extraterritorial overreach. Cormann's appointment as head of the OECD in 2021 was seen as a nod to former US President Donald Trump, who supported his candidacy.
The revised agreement watered down a previous proposal from 2021, which set a minimum global corporate tax rate of 15%. The new deal is meant to prevent multinational corporations like Apple and Nike from exploiting accounting and legal loopholes to shift earnings to low- or no-tax havens. These havens often include countries such as Bermuda and the Cayman Islands, where companies do little or no business.
The Trump administration had previously criticized a similar proposal, claiming it was not applicable in the US. The Biden administration negotiated the original 2021 deal, but former Treasury Secretary Janet Yellen played a crucial role in its development. Congressionally Republicans at the time opposed the plan, arguing that it would make the US less competitive globally.
Tax transparency groups have criticized the revised OECD agreement, with one policy director stating that it risks nearly a decade of progress on corporate taxation and allows the largest American companies to continue benefiting from tax havens. Tax watchdogs argue that the minimum tax is intended to halt an international trend towards lowering corporate taxes, which has led multinational businesses to book their profits in low-tax countries.
The exemption of the US from this global deal highlights the challenges in implementing effective international taxation policies.
A landmark agreement reached by nearly 150 countries aims to curb multinational corporations from shifting profits to low-tax jurisdictions. However, the US has been exempted from the deal, sparking outrage among tax transparency groups. The Organisation for Economic Cooperation and Development (OECD), led by Secretary General Mathias Cormann, described the agreement as a "landmark decision in international tax cooperation." It is expected to enhance tax certainty, reduce complexity, and protect tax bases.
In contrast, US Treasury Secretary Scott Bessent hailed the deal as a "historic victory" that preserves American sovereignty and protects workers and businesses from extraterritorial overreach. Cormann's appointment as head of the OECD in 2021 was seen as a nod to former US President Donald Trump, who supported his candidacy.
The revised agreement watered down a previous proposal from 2021, which set a minimum global corporate tax rate of 15%. The new deal is meant to prevent multinational corporations like Apple and Nike from exploiting accounting and legal loopholes to shift earnings to low- or no-tax havens. These havens often include countries such as Bermuda and the Cayman Islands, where companies do little or no business.
The Trump administration had previously criticized a similar proposal, claiming it was not applicable in the US. The Biden administration negotiated the original 2021 deal, but former Treasury Secretary Janet Yellen played a crucial role in its development. Congressionally Republicans at the time opposed the plan, arguing that it would make the US less competitive globally.
Tax transparency groups have criticized the revised OECD agreement, with one policy director stating that it risks nearly a decade of progress on corporate taxation and allows the largest American companies to continue benefiting from tax havens. Tax watchdogs argue that the minimum tax is intended to halt an international trend towards lowering corporate taxes, which has led multinational businesses to book their profits in low-tax countries.
The exemption of the US from this global deal highlights the challenges in implementing effective international taxation policies.
. Don't get me wrong, I'm all for tax transparency and fairness, but come on, it's like they're not even trying to play by the same rules as everyone else 
. And let's be real, if other countries are already starting to crack down on these loopholes, you'd think the US would wanna join in on the fun 
. But nope, they just gotta have their own special treatment, even if it means they're basically exempting themselves from all the good stuff 
. It's like, what's next? Are they gonna say they can't be bothered to sign up for climate change deals because of "sovereignty" or something? 
This is a major letdown for global equality and fairness. The US just got off scot-free, while other countries have to follow the rules 
It just shows how powerful the US is in the global arena and how hard it is for them to agree on anything that might affect their interests.
. And what about the Biden administration trying to negotiate a deal, only to have it watered down? It's all very frustrating 
. But instead, they get to play both sides of the fence - supporting the OECD deal while still exploiting those tax loopholes in other countries 
.
. Like, how can you justify allowing American companies to use the same tactics as multinational corps? 
It's just not right.
like what kinda game is that? its not fair to everyone else who has to pay their taxes on time. i guess the us gov just doesnt wanna play by the same rules as everyone else 
I mean come on, what's going on here? 150+ countries agreeing to basically hold each other's hands on taxes and then the US gets to just opt out like it's their own personal exemption? 
"Power tends to corrupt, and absolute power corrupts absolutely" – Lord Acton