US Tax Credit Issues Loom for Companies Under Global Minimum Tax

Companies are looking to the IRS to clarify how and to what extent the global minimum tax they pay in other countries will be eligible for a foreign tax credit back home.

If the US doesn’t give them a credit when its own minimum tax rule overlaps with minimum taxes applied domestically by other countries, companies risk being taxed twice on the same income.

Under the set of rules comprising the 2021 OECD-led global tax deal’s Pillar Two, countries will apply a 15% minimum tax rate to large corporations. Many countries are now in the process of implementing the measure, ...