The Organization for Economic Co-operation and Development (OECD) Global Tax Deal (Global Tax Deal)

January 20, 2025

Presidential Actions

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Action Summary

Subject: OECD Global Tax Deal affecting U.S. tax sovereignty and economic policy.
Sovereignty Assertion: Declares that the Global Tax Deal, as supported by the prior administration, has no force or effect in the United States unless Congress enacts its provisions.
Notification Requirement: Instructs the Secretary of the Treasury and the Permanent Representative to the OECD to formally notify the OECD that previous commitments are null within the U.S.
Investigative Measures: Directs the Secretary of the Treasury, in consultation with the U.S. Trade Representative, to examine foreign tax practices that are extraterritorial or discriminatory toward American companies and prepare a list of protective options for the President.
Implementation Timeline: Requires the Treasury to deliver findings and recommendations to the President, via the Assistant to the President for Economic Policy, within 60 days.
General Provisions: Clarifies that the memorandum does not limit established executive authorities, does not establish enforceable rights, and is subject to applicable law and appropriations.

Risks & Considerations

The memorandum’s rejection of the OECD Global Tax Deal could lead to increased tensions with international partners, potentially affecting Vanderbilt University’s international collaborations and partnerships.
There is a risk of retaliatory tax measures from other countries, which could impact American businesses and, by extension, any international funding or donations that Vanderbilt might receive from affected entities.
The focus on protecting American companies from extraterritorial tax measures may lead to changes in tax policies that could affect the financial planning and operations of institutions like Vanderbilt University.
Vanderbilt may need to monitor developments in international tax policies closely, as changes could influence the university’s global engagement strategies and financial transactions involving international partners.

Impacted Programs

Vanderbilt’s Owen Graduate School of Management may need to adjust its curriculum to address changes in international tax policies and their implications for global business strategies.
The Office of International Affairs might need to reassess its strategies for international partnerships and collaborations in light of potential changes in the global tax landscape.
Research programs that rely on international funding or partnerships could be affected by shifts in tax policies and international relations.

Financial Impact

Potential retaliatory tax measures could impact the financial contributions and investments from international partners, affecting Vanderbilt’s funding and financial planning.
Changes in tax policies may influence the university’s endowment management and investment strategies, particularly if international markets are affected.
Vanderbilt may need to consider the financial implications of any protective measures adopted by the U.S. in response to non-compliance with tax treaties by other countries.

Relevance Score: 3 (The memorandum presents moderate risks involving compliance and potential impacts on international collaborations and financial strategies.)

Key Actions

Vanderbilt’s Office of Federal Relations should monitor developments related to the OECD Global Tax Deal and any potential retaliatory international tax regimes. Understanding these changes will be crucial for assessing their impact on university operations, particularly in terms of international collaborations and funding.
The Owen Graduate School of Management should consider incorporating discussions on international tax policies and their implications for American businesses into its curriculum. This will prepare students to navigate complex global economic environments and enhance their competitiveness in the job market.
Vanderbilt’s Legal Affairs Office should review any international agreements or partnerships to ensure compliance with U.S. tax policies and to mitigate risks associated with potential changes in international tax regimes.

Opportunities

The executive order provides an opportunity for Vanderbilt’s Law School to engage in research and policy analysis on the implications of the OECD Global Tax Deal and its impact on U.S. sovereignty and economic competitiveness. This research can contribute to national discussions and policy-making processes.
By hosting conferences or workshops on international tax policy, Vanderbilt University can position itself as a leader in the field, attracting scholars, policymakers, and business leaders to discuss and address these critical issues.

Relevance Score: 3 (Some adjustments are needed to processes or procedures to address potential impacts on international collaborations and funding.)

Average Relevance Score: 3

Timeline for Implementation

Within 60 days for the Secretary of the Treasury to deliver findings and recommendations to the President.

Relevance Score: 3

Impacted Government Organizations

Department of the Treasury: Responsible for notifying the OECD that previous commitments under the Global Tax Deal have no force in the United States and for investigating foreign tax measures.
United States Trade Representative (USTR): Tasked with collaborating with the Secretary of the Treasury to implement steps to protect American businesses from discriminatory tax practices.
Permanent Representative of the United States to the OECD: Charged with conveying the U.S. stance on the Global Tax Deal to the OECD.
Assistant to the President for Economic Policy: Acts as a conduit for the Treasury’s findings and recommendations on protective measures regarding foreign tax rules.
Office of Management and Budget (OMB): Its Director’s functions relating to budgetary and administrative proposals are noted to remain unaffected by this memorandum.

Relevance Score: 2 (Between three and five agencies are impacted by the Presidential Actions.)

Responsible Officials

Secretary of the Treasury – Tasked with notifying the OECD that prior commitments have no effect in the United States, investigating foreign tax compliance issues, and delivering findings and recommendations to the President.
United States Trade Representative – Assigned to notify the OECD alongside the Secretary of the Treasury and to assist in taking additional steps to implement the memorandum’s directives.
Permanent Representative of the United States to the OECD – Responsible for formally communicating that previous commitments under the Global Tax Deal have no force or effect in the United States.

Relevance Score: 4 (Directives impact agency heads charged with major economic and international policy functions.)