Peter Barnes Comments on U.S. ‘Side-by-Side’ System in Bloomberg Law

The US demand for its tax system to sit “side-by-side” with the global minimum tax framework faces a long path forward, filled with technical and political roadblocks.

Last weekend’s announcement of an “understanding” among Group of Seven countries that US companies wouldn’t be subject to key aspects of the minimum tax—Pillar Two of a global tax deal—is only the first step to reaching an agreement with the US, foreign governments and observers say.

. . .

The US could make progress with other countries if it reframed the “side-by-side” system, said Peter Barnes, a former Treasury Department official who is currently Of Counsel at Caplin and Drysdale.

“A reframe that says the perception of purity that we’ve been following on Pillar Two is asking too much, and that what we want is substantial compliance, and the US regime provides substantial compliance,” Barnes said.

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