An OECD deal imposing a global minimum tax rate will stabilize U.S. corporations’ tax positions. 147 countries agreed on a “side-by-side” agreement exempting large U.S. companies from certain requirements of the Pillar 2 framework. The tax regime favored by Biden aims to curtail international tax avoidance.

The deal exempts U.S. companies from Pillar 2 requirements under €750 million in revenues, but allows non-U.S. countries to impose a 15% tax top-up on U.S. multinationals. KPMG experts predict U.S. companies will benefit in the long term, despite the complexity in the short term. The Trump administration didn’t oppose the top-up tax component.

Companies may still have to complete all Pillar 2 calculations for this year despite exemptions until jurisdictions enact the side-by-side agreement into law. Expectations vary for the enactment timeline, with some countries taking up to 15 months to adopt changes. Monitoring legislative developments globally is key for compliance.

The deal will simplify U.S. taxpayer compliance starting Jan. 1, 2026. Companies can tailor information returns for specific tax jurisdictions, streamlining efforts. Future coordination with other OECD tax rules is needed. The U.S. is the only country qualifying for the safe harbors in the agreement.

Read more at Yahoo Finance: OECD deal should ease global tax compliance, but not immediately