New Executive Orders: Tax Implications For Multinationals

On his first day in office, President Trump issued two executive orders with potentially significant tax ramifications for US and non-US headquartered multinational companies. The orders raise the prospect of the United States implementing retaliatory measures in response to concerns that countries are enacting extraterritorial and discriminatory taxes aimed at US companies. The order also indicates a shift in the US approach with respect to recent OECD tax efforts, though it remains to be seen whether the shift is only one of tone or also tactics and substance.

Background

The United States has long been a key participant in the OECD's work to shape international tax policy. In recent years, the OECD has been focused on measures to address "base erosion and profit shifting" (BEPS) by multinational corporations to reduce tax. One aspect of the OECD work addresses taxation of the digital economy, including rules that would essentially re-allocate a portion of the