By Keerthi Ramesh
In a major shift in international tax policy, U.S. based multinational corporations have been excused from key provisions of a global minimum corporate tax agreement finalized this week by the Organization for Economic Co-operation and Development (OECD).
Nearly 150 nations agreed to a long-planned framework aimed at reducing tax avoidance by large companies that shift profits to low-tax jurisdictions, such as Bermuda or the Cayman Islands. The centerpiece of that framework is a 15% minimum tax on corporate profits globally. But after intense negotiations led by the Trump administration, the United States won carve-outs that limit how the rules apply to American multinationals.
U.S. Treasury Secretary Scott Bessent described the outcome as a “historic victory” that protects American economic interests and preserves what he called U.S. “tax sovereignty.” According to a Treasury press statement, the arrangement allows U.S. companies to remain subject to domestic minimum tax rules rather than the OECD’s broader regime.
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The revised tax deal reflects a significant departure from a 2021 global pact championed by then-Treasury Secretary Janet Yellen under the Biden administration, which had strongly backed the imposition of a unified global tax standard to curb profit shifting and base erosion.
Republican leaders on Capitol Hill celebrated the agreement as a win for national competitiveness and job creation. Senate Finance Committee Chairman Mike Crapo (R-Idaho) and House Ways and Means Chairman Jason Smith (R-Mo.) issued a joint statement applauding the exemption as part of an “America First” approach to international tax policy.
But the deal has drawn sharp criticism from tax fairness advocates and experts who argue the U.S. carve-out undermines years of global efforts to reign in corporate tax avoidance. Zorka Milin, policy director for the Financial Accountability and Corporate Transparency (FACT) Coalition, warned that allowing large U.S. companies to sidestep the global minimum tax risks rekindling a “race to the bottom” in international tax competition.
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Supporters of the global deal argue it still secures broad international cooperation on minimum tax standards and simplifies compliance for companies operating across many jurisdictions. OECD Secretary General Mathias Cormann said the agreement enhances “tax certainty” and shields national tax systems from erosion.
The new framework also includes provisions that help align tax rules more closely with domestic systems and reduce complexity for businesses. Observers say the side-by-side tax regime for the U.S. will take effect for fiscal years beginning Jan. 1, 2026, while discussions continue on how to further harmonize international tax norms.