Minimum taxation in the United States in the context of GloBE

Resource Information

The work Minimum taxation in the United States in the context of GloBE represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

Minimum taxation in the United States in the context of GloBE

Creator

• Avi-Yonah, R.S
• Salaimi, M

Subject

• GloBE Proposal (OECD)
• IIR (OECD)
• Pillar 2 (OECD)
• BEAT
• UTPR (OECD)
• minimum tax
• single tax principle
• TCJA
• GILTI

Language

eng

Summary

The introduction of the minimum tax in Pillar two of the OECD/G20/Inclusive Forum (IF) framework was generally seen as a response to the US Tax Cuts and Jobs Act (TCJA) of 2017. The TCJA included both a minimum tax on outbound income (the Global Intangible Low-Taxed Income, or ‘GILTI’) and a minimum tax on inbound income (the Base Erosion Anti-Avoidance Tax, or ‘BEAT’). These were seen as the precursors to the Income Inclusion Rule (IIR) and the Under Tax Payments Rule (UTPR). Thus, unlike Pillar one which was perceived as a device to impose more tax on the US digital giants, Pillar two was seen as more consistent with US tax policy. This story is true to some extent, but the relationship between the US and Pillar two is more complicated. Pillar two was the culmination of years of efforts to implement the single tax principle, which has its origins in the 1920s but was not the guiding principle of US tax policy for a long period before the TCJA. Moreover, the TCJA does not fully implement Pillar two, and it is unclear whether the US can in fact do so. In this article, the authors first discuss the relationship between the TCJA and Pillar two, then the possible US responses to Pillar two, and finally what would happen if the US does not implement Pillar two. In general, if Pillar two is not implemented in the US, the tax consequences are likely to be increased double taxation as well as a shift in revenues from the US to foreign jurisdictions

Citation source

In: Intertax. - Alphen aan den Rijn. - Vol. 50 (2022), no. 10 ; p. 673-677

Geographic coverage

North America

Language note

English