In 2021, nearly 140 countries participated in the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework plan and approved a two-pillar plan addressing international tax rules. The more broadly applicable of these was Pillar 2, which imposes a 15% minimum tax on earnings of multinational enterprises with revenues of at least 750 million euros, equivalent to about $811 million in recent rates.
Pillar 2 has been ratified by the governments of more than 100 countries, so U.S. multinationals are likely to deal with its effects in many places. However, while the U.S. itself recently converted to a global intangible low-taxed income regime that taxes controlled foreign corporations with 50% or more ownership by U.S. persons, U.S. adoption of Pillar 2 has not happened. For various reasons, domestic adoption of the Pillar 2 framework seems unlikely in the near future.
In an article originally published in Bloomberg Tax’s Tax Management International Journal, Grant Thornton's International Tax Partner Cory Perry, Managing Director Mary Xu and Senior Manager Mike Del Medico write about how U.S. multinationals should prepare for Pillar 2 compliance and why it’s important to start those efforts now. Read the article here.
Contact:
Cory Perry
Partner, Washington National Tax Office
Washington DC, Washington DC
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