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  • ARTICLE - Global

    The Global Minimum Tax Deal Under Pressure – Is the US Holding It Back?

    30 Mar

    Global Minimum Tax Deal Under Pressure – Introduction

    Just when the world thought it was on the cusp of a global tax breakthrough, cracks are beginning to show.

    The landmark OECD agreement aimed at overhauling how multinational companies are taxed is facing renewed opposition – and much of the resistance is coming from the United States.

    This could have major implications for how, when, and even if the deal is implemented.

    What Is the Global Tax Deal?

    The OECD’s two-pillar framework was designed to tackle tax avoidance and ensure large multinationals pay a fairer share of tax, wherever they operate.

    Pillar One reallocates taxing rights so market countries can tax a portion of profits.

    Pillar Two introduces a global minimum corporate tax rate of 15% for companies with annual revenues above €750 million.

    Over 135 countries, including the US, have committed in principle. But turning that agreement into domestic law is proving to be the real challenge.

    Why Is the US Wavering?

    Although the Biden administration supported the OECD framework, political realities have changed.

    With a divided Congress and strong Republican opposition, passing necessary legislation has become difficult.

    Critics in the US argue that the global minimum tax could hurt American competitiveness by effectively outsourcing tax sovereignty.

    There’s also concern that other countries are implementing Pillar Two but dragging their feet on Pillar One – potentially putting US firms at a disadvantage.

    Impact on Global Progress

    US hesitancy could derail the entire project.

    Other countries, particularly in the EU and Asia, are moving forward with minimum tax rules.

    If the US doesn’t follow suit, it undermines the whole concept of a level playing field.

    There’s also a risk that disputes over digital taxes, which Pillar One was supposed to resolve, could flare up again if countries lose patience with the OECD timetable.

    What Happens Next?

    All eyes are now on the US Congress and upcoming elections.

    Without US implementation, the deal lacks weight — and countries may return to unilateral measures like digital services taxes.

    This would be a setback for international cooperation and tax certainty.

    Global Minimum Tax Deal – Conclusion

    The global tax deal was a diplomatic achievement, but its future is far from guaranteed.

    If the US backs away or delays indefinitely, other countries may rethink their own commitments — and the dream of a fairer global tax system could stall once more.

    Final thoughts

    If you have any queries about this article on the global minimum tax, or tax matters in the United States then please get in touch.

    Alternatively, if you are a tax adviser in the United States and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.

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