Rethink OECD Minimum Tax’s Treatment of Credits, Businesses Say

The Organization for Economic Cooperation and Development should reconsider the way certain kinds of tax credits will be treated under global minimum tax rules, an international business lobbying group said in a Friday letter to the organization.

Under the minimum tax rules, known as Pillar Two, tax incentives such as some credits for research and development could lower a company’s effective tax rate below the 15% minimum, leading other countries to apply extra tax to the company receiving them—while other kinds of credits do not have as big an impact on a company’s rate calculation.

Measures that could be affected ...