PARIS – Over 145 countries reached consensus on January 5 to update the 2021 global minimum corporate tax pact, tailoring it to address U.S. objections that the original rules unfairly targeted American multinationals.
The Organisation for Economic Cooperation and Development (OECD) confirmed the revised package upholds the core 15 percent minimum tax rate, ensuring large companies pay a floor level of tax regardless of operating location. Key changes introduce simplifications and exemptions to harmonize with U.S. domestic minimum tax rules, resolving pushback from the Trump administration.
OECD Secretary-General Mathias Cormann hailed the outcome in a statement: it “enhances tax certainty, reduces complexity, and protects tax bases.”By October, more than 65 nations had started rolling out the 2021 framework, which mandates a 15 percent corporate tax or top-up levies on multinationals reporting profits in low-tax havens.
The upgrade cements widespread support following a June G-7 accord, including the U.S., that carved out relief for select American firms. Brokered after U.S. pressure on remaining holdouts, the January 5 deal averts further erosion.
Uncertainty had loomed since President Donald Trump last January slammed the Biden-era agreement as inapplicable to the U.S., with threats of retaliatory taxes on nations taxing American businesses under its terms. This revision stabilizes the landmark effort to curb profit-shifting and tax competition worldwide.