USA Law and Practice Contributed by: Devon M. Bodoh, Joseph M. Pari and Blake D. Bitter, Weil, Gotshal & Manges LLP
exemption, such non-US resident may be treated as having income that is effectively connected with the US and subject to US tax generally at individual income tax rates applicable to US residents. To the extent such non-US person is not treated as having effectively connected income in the US but receives a salary for activities in the US, such income may be subject to 30% (subject to reduction under an appli - cable income tax treaty). Remote working is not specifically addressed and the general rules regarding physical presence and activi - ties carried on in the US generally apply. Remote work may therefore cause a non-US resident employee and/or non-US resident employer to have a taxable presence in the US. See 2.6 Definition of Permanent Establishment . 3.6 Other Income There are generally no other types of income that are subject to special taxation rules in the USA. 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B Amount B is not presently implemented in the USA. In December 2025, the US Treasury and IRS issued a notice (Notice 2025-4) announcing their intent to issue proposed regulations that would provide a new simplified and streamlined approach (SSA) for pric - ing certain controlled transactions (generally those described in Amount B of Pillar One) involving mar - keting and distribution activities. The Treasury and the IRS intended the proposed future regulation would implement the substance of Amount B in its entirety through the SSA. The notice provided that the future proposed regulations would generally apply the SSA at a taxpayer’s election. Such election would be made on a transaction-by-transaction basis in each taxable year in which the taxpayer desired the SSA to apply. Generally, the future regulations would create an addi - tional safe harbour (subject to certain exceptions) for the US transfer pricing rules based on the SSA. Tax - payers could rely on the notice (before the proposed regulations were published) for taxable years begin - ning on or after 1 January 2025.
However, on 20 January 2025, President Donald Trump issued an executive order (the “BEPS Execu - tive Order”) stating that the global tax deal with the OECD (the “Global Tax Deal”) would have no force or effect in the US and that the Treasury would notify the OECD that any commitments made by the Biden administration with respect to the Global Tax Deal would have no force or effect in the absence of an act by congress. Accordingly, it is unclear to what extent such regulations may be forthcoming. 4.2 Pillar One – Amount A The US has not taken action to implement Amount A of Pillar One, and based on President Trump’s BEPS Executive Order (see 4.1 Pillar One – Amount B ), it is unlikely that any further actions on Pillar One will The global minimum tax under Pillar Two has generally not been implemented in the USA. However, the USA has implemented a number of provisions based on the base erosion and profit shifting (BEPS) initiatives that are intended to address the same concerns as Pillar One and Pillar Two. For example, the US enacted the Tax Cuts and Jobs Act (TCJA) at the end of 2017, which generally attempts to neutralise the double non- taxation effects of: • inbound dividends involving hybrid arrangements, by either denying a participation exemption or occur at present. 4.3 Pillar Two requiring domestic inclusion (depending on wheth - er the hybrid dividend is received by a domestic corporation or a controlled foreign corporation); and • outbound deductible interest or royalty payments that produce a deduction/no inclusion outcome owing to hybridity by disallowing such deduction. The TCJA further expanded a limitation on the deduct - ibility of interest expense (which, very generally, is lim - ited to 30% of EBITDA) and enacted a base erosion and anti-abuse tax (BEAT), which targets base erosion by imposing additional tax on certain large US cor - porations that make deductible payments to foreign related parties. Such additional tax is designed as a 10% minimum tax (scheduled to increase to 12.5% in 2025) imposed on modified taxable income.
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