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
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