US Policy and Pillar 2
The Evolution of US Tax Policy Toward OECD Pillar 2 and Its Global Implications
Reuven Avi-Yonah
Irwin I. Cohn Professor of Law, the University of Michigan
This paper analyzes the United States’ evolving position on OECD Pillar 2, focusing on the Trump administration’s initial rejection and subsequent negotiations to exempt US multinationals from the Undertaxed Profits Rule (UTPR). It examines the legislative and diplomatic strategies that led to international acceptance of GILTI as a valid IIR. The analysis concludes that the resulting compromise preserves US tax sovereignty while maintaining the global framework’s integrity