Treasury expressly framed January’s side-by-side package as “recogniz[ing] the tax sovereignty of the United States over the worldwide operations of U.S. companies.” Although Pillar Two may have survived, the side-by-side package complicates the OECD’s multilateral framework and may give the United States a competitive advantage.
But what if the side-by-side package actually constrains U.S. sovereignty, either by shrinking the universe of tax reform options or by changing the terms of legislative debates about reform? The side-by-side package was a “major victory” for U.S. multinationals, but was it an unequivocal one? More from Bloomberg Tax, below the fold.
Lauren Vella, Global Tax Deal Sparks Fear US Law Will Be Tougher to Change, Daily Tax Report Int’l (Jan. 26, 2026):
Josh Odintz, a partner at Holland & Knight LLP, [said] there are currently questions within the tax community about whether [the side-by-side] deal “places some constraints on the US tax code.”
“What if the United States were to try to lower its corporate rate, let’s say, to 15%, or eliminate its corporate AMT? What happens at that point?” he said. . . .
“I got that question [about corporate tax rates] within probably two hours of this agreement being released, and I’ve probably gotten it about a half a dozen times this week . . . ,” said Pat Brown, a co-leader at PwC’s Washington National Tax Services practice.
Related TaxProf Blog coverage:
- Harpaz Presents Two Papers on AI and Sovereignty at AALS and JILSA (Jan. 10, 2026)
- Law360: Top Tax Cases and Policies for 2026 (Jan. 10, 2026)
- OECD Press Release and Webinar: 147 Countries Agree on Key Elements of a “Side-by-Side” Global Minimum Tax Arrangement (Jan. 9, 2026)
- Dagan: Substantive Tax Sovereignty Under Globalization (Jan. 14, 2025)
