Republican members of the House of Representatives’ Committee on Ways and Means are seeking to block the United States from entering the global corporate minimum tax agreement reached in 2021.

The Unfair Tax Prevention Act, introduced by U.S. Rep. Ron Estes (R-Kan.), would discourage foreign countries from implementing the Organization for Economic Cooperation and Development (OECD)'s Pillar Two Under Taxed Profits Rule (UTPR). That rule aims to ensure that multinational companies pay a global minimum tax of 15 percent. A country is allowed to raise taxes on a business if it is part of a larger company that pays less than 15 percent in another jurisdiction. The OECD recently delayed implementation of the UTPR until 2026.

The proposed legislation would impose a reciprocal tax measure that would apply as long as a foreign country's UTPR surtax on American workers and businesses remains in place.

“After repeated objections from policymakers, including myself, and business leaders, the Biden administration has negotiated a deal with the OECD that has a disproportionately negative effect on the United States and our economic competitiveness,” Estes said in a statement. “Building on the Defending American Jobs and Investment Act, introduced by Ways and Means Republicans, this legislation protects the U.S. tax base from unfair extraterritorial taxes by foreign countries —and imposes stiff penalties on those countries if they implement them. It’s time for the OECD and foreign countries to abandon the UTPR surtax and its fundamental flaws.”

“Congressional Republicans are not going to turn a blind eye to other countries—emboldened by the Biden Administration’s dangerous and misguided policies—targeting U.S. companies with higher taxes that will destroy U.S. jobs and steal U.S. revenues,” the Ways and Means Committee Chairman, U.S. Rep. Jason Smith (R-Mo.), said in the same statement.

U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Committee on Finance, disagreed.

"There are concrete wins for American taxpayers and businesses in this announcement, particularly for companies involved in our clean energy sector that's booming as a result of the Inflation Reduction Act,” he said in a statement. “It's a clear sign that the U.S. can shape this process in beneficial ways, and Republicans ought to give up their inflexible opposition to it or else American workers and businesses will lose out in the long run."

"The Two-Pillar Solution will provide stability for the international tax system, making it fairer and work better in an increasingly digitalized and globalized world economy," OECD Secretary-General Mathias Cormann said in a statement last week reported by Accounting Today.