Treasury Official on Int’l Tax ‘Simplification’ Efforts

While there is no doubt much work remains in unraveling the complexities of international taxation in an increasingly digital global economy, a Treasury official believes “significant progress” has been made and that the U.S. is working to ensure domestic businesses and their employees “receive a fair deal.”

The official, Deputy Assistant Secretary (International Tax Affairs) Scott Levine, was the keynote speaker at the 2025 D.C. Bar Tax Conference, held January 15 and 16. Levine, in the final days of the Biden Administration, reflected on how the administration “led the charge” in ongoing negotiations with the Organization for Economic Cooperation and Development (OECD).

Levine remarked on the challenges with balancing the “simplification” of tax compliance requirements for U.S. business taxpayers with conforming with the OECD’s two-pillar solution for ending the so-called race to the bottom in which companies worldwide shift profits to no- and low-tax jurisdictions.

The administration acknowledges its leadership role in engaging with these discussions with the approximately 140 OECD members, but the U.S. has not formally adopted (through legislation), the frameworks of Pillar One (concerning revenue sourcing) and Pillar Two (a 15% global minimum tax on large multinational corporations).

Other countries, especially in the Europe and Asia, have already adopted implementing legislation or are considering legislative proposals. U.S. taxpayers will be affected as jurisdictions move forward, with or without the U.S.

Levine said, “U.S. policymakers in both parties continue to be significantly concerned” with the potential ramifications of international tax treatment of online-based transactions, such as digital service taxes (DSTs) like the DST recently enacted by Canada. U.S. businesses, many federal lawmakers say, are at risk of double taxation or put at an economic advantage, especially against China.

Treasury is “still working to move the ball forward on” what it calls “Phase One” of its approach to incorporating into the Tax Code “Amount B” of Pillar One, which is a simplified method for applying the arm’s length principle to certain marketing and distribution services transactions. Phase One consisted of guidance on Treasury’s version of Amount B, called the “simplified streamlined approach,” or SSA.

“U.S. taxpayers may now elect to use Amount B for in-scope activities, saving them, the IRS, and other participating revenue collection agencies valuable time and resources that can be deployed for more productive use,” said Levine. He added that Treasury expects that Amount B will become widely adopted globally, and that spare resources can be allocated towards applying the SSA model to transfer pricing and other issues.

The work done so far with OECD “has only strengthened the foundations of U.S. leadership in our economic success in order to work collaboratively with other jurisdictions and help shape global solutions to the complex tax challenges of the 21st century,” Levine said in closing. “I hope the United States continues to have a strong voice among our negotiating partners.”