On 26 June 2025, US Secretary of the Treasury Scott Bessent announced an international tax agreement reached at the G7. The agreement excludes US companies from the global minimum level of taxation for multinational enterprise groups under the Global Anti-Base Erosion rules - also known as “Pillar Two” - as agreed upon by the OECD/G20 Inclusive Framework on BEPS in the Statement to Address the Tax Challenges Arising from the Digitalisation of the Economy and the Detailed Implementation Plan, dated 8 October 2021. Under Pillar Two, large multinationals are required to pay a minimum 15% tax in each jurisdiction where they operate.
As a result, House Ways and Means Committee Chairman Jason Smith and Senate Finance Committee Chairman Mike Crapo issued a statement confirming that the US have dropped a controversial tax provision - also referred to as the “revenge tax” that would have notably imposed higher withholding taxes on certain foreign persons, including notably EU-domiciled funds investing in US equities.
In this article, our Tax Partner, Andreas Medler, explains the consequences of these announcements.