S ESOP Companies Included in US Exemption from Global Minimum Tax

The Employee-Owned S Corporations of America (ESCA) reports that the Organisation for Economic Co-operation and Development (OECD) announced that a “side by side” arrangement will exempt all US companies from a new 15% tax on the global income of large multinational corporations. Senior US Treasury staff members have assured ESCA representatives that the US exemption will cover multinational US ESOP-owned S corporations, which otherwise would be subject to entity-level taxes.

Originally, the OECD global minimum tax would have looked through foreign subsidiaries of S corporation ESOP companies to tax their US income. The US ultimately reached an agreement to exempt US companies from the OECD tax, which the Treasury Department announced yesterday.