Tax

January 20, 2025 (W.H. Link) – On January 20, 2025, President Donald Trump issued a memorandum declaring that the Organization for Economic Co-operation and Development (OECD) Global Tax Deal holds no force or effect within the United States without Congressional approval. He directed the Secretary of the Treasury and the U.S. Trade Representative to identify foreign tax practices that are extraterritorial or disproportionately affect American companies and to develop protective measures in response.

This action effectively withdraws the U.S. from the 2021 OECD-brokered agreement, which established a global minimum corporate tax rate of 15%. President Trump’s decision may lead to increased taxes on foreign businesses operating in the U.S. or heightened tariffs on countries enforcing the OECD tax rules, potentially escalating international tax disputes.

The withdrawal has significant implications for multinational corporations, particularly U.S.-based tech giants, as it may prompt other nations to impose additional taxes on these companies. This move could undermine multilateral efforts to create a fair international tax system and may lead to retaliatory measures from affected countries.