Congress has a longstanding practice of incentivizing various business activities with a panoply of tax credits and deductions. While it’s generally a good thing when tax incentives lower a U.S. corporation’s effective tax rate (ETR), a low ETR can create new headaches in the Pillar 2 world. Rates below the GloBE’s 15 percent minimum tax rate could subject domestic income of a U.S.-parented group to the Undertaxed Payments Rule (UTPR) of other jurisdictions in the group. Will foreign jurisdictions reap the benefit of these incentives, or will U.S.-parented multinational enterprises curtail investment in the domestic activities and projects Congress is promoting, and does the recently released Commentary shed some light on this issue?
Our host Gary Scanlon welcomes KPMG Tax professionals Quyen Huynh and Marcus Heyland to discuss the impact of the GloBE Rules on U.S. tax incentives.