The Treasury Department said Monday it has reached an agreement with more than 145 countries in the OECD/G20 Inclusive Framework to exempt U.S.-headquartered companies from the OECD’s Pillar Two global minimum tax rules, while keeping those firms subject only to U.S. global minimum taxes.
In a statement dated Jan. 5, Treasury Secretary Scott Bessent said the deal follows President Trump’s “Day One” executive orders declaring that the prior administration’s proposed OECD Pillar Two arrangement would have “no force or effect” for the United States. Treasury said it worked “in close coordination with Congress” to secure the exemption.
Treasury described the outcome as a “side-by-side agreement” that recognizes U.S. tax sovereignty over the worldwide operations of U.S. companies, while also recognizing other countries’ authority to tax business activity within their own borders.
The department said the agreement also protects the value of the U.S. research and development credit and other congressionally approved incentives tied to investment and job creation in the United States.
Bessent called the deal a “historic victory” against what he described as “extraterritorial overreach.”
Treasury said it will continue engaging foreign governments to ensure full implementation, increase international tax stability, and pursue further talks on the taxation of the digital economy.
