Trump declares global tax deal has ‘no force or effect’ in US
Trump directs Treasury to identify ‘protective measures’ on tax
Memo warns US firms may face ‘retaliatory’ foreign tax regimes
Collapse of Pillar 1 talks may revive digital services levies
Jan 20 (Reuters) – President Donald Trump on Monday declared that a global corporate minimum tax deal “has no force or effect” in the U.S., effectively pulling America out of the landmark 2021 arrangement negotiated by the Biden administration with nearly 140 countries.
Trump, in a presidential memorandum issued hours after taking office, also ordered the U.S. Treasury to prepare options for “protective measures” against countries that have – or are likely to – put in place tax rules that disproportionately affect American companies.
The European Union, Britain and other countries have adopted the 15% global corporate minimum tax, but the U.S. Congress never approved measures to bring the U.S. into compliance with it. The U.S. has a roughly 10% global minimum tax, part of Trump’s landmark 2017 tax cut package approved by Republicans.
But countries that have adopted the 15% global minimum tax may be in a position to collect a “top-up” tax from U.S. companies paying a lower rate. Trump’s memo referred to such actions as “retaliatory.”
“Because of the Global Tax Deal and other discriminatory foreign tax practices, American companies may face retaliatory international tax regimes if the United States does not comply with foreign tax policy objectives,” the memo reads.
“This memorandum recaptures our Nation’s sovereignty and economic competitiveness by clarifying that the Global Tax Deal has no force or effect in the United States.”
