US Global Minimum Tax Carveout Expected to Apply in 2026 (1)

A system currently under negotiation at the OECD that would exempt US companies from major parts of the global minimum tax framework will apply in 2026, a US delegate to the organization said.

Isaac Wood, attorney-adviser at the Treasury Department’s Office of Tax Policy, said the US’s expectation is that the exemption, which is commonly referred to as the “side-by-side” system, will go into effect on Jan. 1.

“The reason why that makes sense is because we have this expiring safe harbor in the Pillar Two rules where US multinationals, US earnings will for the first time be subject ...