Trump’s departure from corporate tax agreement endangers global tax collaboration
Date
1/26/2025 2:36:18 AM
(MENAFN) US President Donald trump issued an executive order on Monday, withdrawing the United States from the OECD global corporate tax treaty. The order declared that the agreement would have "no force or effect" in the US, a decision that could undermine international tax cooperation and potentially derail efforts to reform global tax regulations. The move is seen as a setback for a historic initiative that had gained significant global support.
The treaty, which was announced in October 2021, had been signed by 140 countries representing over 90 percent of the world’s GDP, including major economies such as China, the UK, Germany, France, Japan, and Türkiye. The agreement aimed to introduce a minimum 15 percent tax rate on multinational corporations with global revenues over €750 million (USD780.5 million). This would apply to large companies like Google, Amazon, Microsoft, and Meta, starting in 2024.
According to the OECD, the treaty was expected to generate an additional USD17 billion to USD32 billion in global tax revenue, with the biggest gains anticipated for low- and middle-income nations. The goal of the treaty was to reduce tax avoidance by multinational companies that set up operations in countries with low tax rates, such as Ireland and Hungary.
Trump’s executive order criticized the OECD Global Tax Deal, claiming it imposed extraterritorial jurisdiction over American income and restricted the US’s ability to implement tax policies that align with the interests of American businesses and workers. This move is expected to disrupt the ongoing efforts to overhaul international tax rules.
MENAFN26012025000045015839ID1109129537
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.