The U.S. Executive Order to Leave the OECD: Implications and Impacts for Global Trade and Taxation

FIRST PUBLISHED ON www.taxriskmanagement.com on 28 January 2025 at: https://www.taxriskmanagement.com/us-withdrawal-oecd-global-tax-deal/

On January 22, 2025, former President Donald Trump issued an executive order that has sent ripples across the global economic landscape. The order announced the United States’ withdrawal from the OECD’s global tax deal, a groundbreaking initiative designed to address tax challenges in the digital economy and establish a minimum global corporate tax rate. This departure marks a significant shift in U.S. trade and tax policy, aligning with Trump’s “America First” agenda, which prioritises bilateral agreements and national sovereignty over multilateral frameworks.

The OECD’s global tax deal, often referred to as BEPS 2.0, was a monumental step in creating a more unified and equitable international tax system. Its two pillars aimed to address the taxation of digital services and to implement a global minimum tax rate of 15%, ensuring multinationals paid a fair share of taxes regardless of their operating jurisdictions. By rejecting this framework, the U.S. has set the stage for a fragmented and potentially contentious global tax environment.

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https://www.taxriskmanagement.com/us-withdrawal-oecd-global-tax-deal/

The article includes:

• Implications for U.S. Multinationals Operating Abroad
• Implications for Non-U.S. Multinationals Operating in the U.S.
• Broader Impacts on International Taxation
• Regional Considerations