United States Denounces OECD Global Tax Deal

On 20 January 2025, the White House issued a memorandum on the OECD Global Tax Deal, which stipulates that the Global Tax Deal has no force or effect in the United States. 

The OECD Global Tax Deal was developed as part of the G20 Inclusive Framework on BEPS, which involves international cooperation to address global tax challenges.

Commitments made by the prior US administration are nullified, based on the absence of Congress approval for measures to bring the US into compliance with the Global Tax Deal. The memorandum emphasizes that the Deal limits the Nation's sovereignty and economic competitiveness by allowing extraterritorial jurisdiction over American income and restricting the ability to implement tax policies that benefit American businesses and workers.

OECD directive

The Secretary of the Treasury and the Permanent Representative of the United States to the OECD have been tasked to notify the OECD accordingly. This directive aims to formally communicate that any commitments made by the prior administration with respect to the Deal are void and unenforceable without Congressional approval. 

Additionally, the Secretary of the Treasury and the US Trade Representative will examine if countries comply with US tax treaties or have measures in place, or are likely to adopt such measures, that are considered extraterritorial or disproportionately affecting American companies. They will then assess which protective measures or other actions the US can take in response. The memorandum specifies that these findings must be presented to the President through the Assistant to the President for Economic Policy within 60 days.

Memorandum conclusion

Furthermore, the memorandum clarifies that it does not create enforceable legal rights or obligations and must be implemented in compliance with existing legal frameworks and budgetary appropriations.

Further developments will be reported as they occur.