Pillar Two Not Hollowed Out by Side-By-Side Deal: US Tax Leader

Richard Nugent was featured in the International Tax Review article, "Pillar Two Not Hollowed Out by Side-By-Side Deal: US Tax Leader." Announced in January, the OECD’s side by side pillar two agreement exempts US parented groups from the income inclusion rule and undertaxed profits rule through a safe harbour that allows a zero top up tax in qualifying jurisdictions.

Richard calls the safe harbour a welcome development that clarifies how pillar two interacts with the US global intangible low taxed income regime and replaces earlier temporary relief measures. He says it reduces uncertainty and compliance burdens, though companies must still meet domestic minimum tax and eligibility requirements.

Richard notes, "Tax policy is an ongoing dialogue, of course. And if down the road people perceive that the safe harbour hasn't sufficiently protected certain interests, then I would imagine at that time there'll be further discussions between the US government and OECD officials.”

Read the full ITR article (subscription required).