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By Elise BOSCHER, Associate, Baker McKenzie Luxembourg Andrea ADDAMIANO, Counsel, Baker McKenzie Luxembourg
Further to executive orders issued by the Administration of the United States shortly after the (re) election of Donald Trump, the United States (U.S.) and the other members of the G7 are engaged in negotiations on a “side-by-side” approach to the OECD’s Pillar Two framework. The aim of the U.S. is to obtain an exemption for U.S.-parented multinational groups from the top-up taxes (Income Inclusion Rule and the Undertaxed Profits Rule) foreseen by Pillar Two by recognizing the U.S. domestic minimum tax regime (GILTI) as functionally equivalent. While the legal basis for such an arrangement may be sound, political hurdles persist, and critics argue...
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