Energy Credits’ Treatment in Global Tax Deal Detailed By OECD (2)

The latest OECD guidance has clarified the global minimum tax’s treatment of transferable tax credits in President Joe Biden’s Inflation Reduction Act.

The 15% global minimum tax, known as Pillar Two, is part of an OECD-led international tax pact involving over 140 countries.

The administrative guidance separates transferable credits into two categories: marketable transferable tax credits and non-marketable transferable tax credits.

Under the IRA, energy companies participating in green projects can sell the credits. The sale can only occur once, and purchasers will be able to lower their federal taxes.

A taxpayer who sells the transferable credit ...