The American Bankers Association this week joined a coalition of trade groups in a letter to Treasury Secretary Janet Yellen expressing strong concerns on the potential negative effects of the Organization for Economic Cooperation and Development’s Pillar 2 minimum tax rules.
The groups urged Treasury to work with the OECD to re-work the model rules to properly allow for tax policy initiatives in the U.S. and other countries to be recognized. The new rules, if adopted in the U.S. and other countries, have the potential to cancel or mitigate U.S. tax policy, the trade groups noted. For banks specifically, the rules would potentially reduce or eliminate the benefits of investing in low income housing, new markets, historic and energy credit projects. In addition, the rules could allow other countries to collect “top-up” taxes to offset the U.S. tax policy incentives, they added.
Finally, the groups pointed out that the implementation of this policy could have a severe negative effect on tax credit markets and have negative implications for important social policy initiatives. ABA continues to closely monitor developments on this issue.
