On January 5, 2026, the Organization for Economic Cooperation and Development (OECD), in conjunction with the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), announced a significant political and technical agreement to advance the global minimum tax rules, known as Pillar Two of the international tax reform package. This package will establish a clearer, simplified, and coordinated basis for cooperation in implementing the minimum tax regime at the international level, in the context of a global and digitalized economy.
Context of the global minimum tax
The global minimum tax is one of the central pillars of the international tax reform agenda promoted in recent years by the OECD and the G20 in response to the challenges posed by the digitalization of the economy and the increasing mobility of capital. These reforms seek to correct the distortions generated by harmful tax competition between jurisdictions, as well as to limit aggressive tax planning strategies that allow certain multinational groups to artificially reduce their tax burden by shifting profits to territories with low or no taxation.
In this context, the global minimum tax is conceived as a mechanism to ensure that large multinational companies pay a minimum level of corporate income tax, regardless of the formal location of their profits. The aim is to strengthen the fairness of the international tax system, protect the tax bases of states, and restore consistency between the place where economic profits are generated and the place where the corresponding taxes are paid.
The agreement was initially reached in 2021 within the framework of the OECD/G20 Inclusive Framework on BEPS (Base Erosion and Profit Shifting). As a result, a minimum effective rate of 15% was established for large multinational groups, generally defined as those with consolidated annual revenues of €750 million or more. This threshold seeks to focus the measure on groups with greater international tax planning capacity, avoiding imposing disproportionate additional burdens on smaller companies.
The implementation of the global minimum tax is articulated through a set of technical rules—known as GloBE rules—that allow jurisdictions to apply complementary taxes when the effective taxation of a group in a given country falls below the agreed minimum. This design reflects a coordinated effort to establish common standards, reduce regulatory fragmentation, and provide greater stability and predictability to the international tax system.
The 2026 agreement: the “Side-by-Side” package
The official OECD communiqué describes how 147 countries and jurisdictions that are members of the Inclusive Framework have agreed on the elements of a global minimum tax package that sets the course for the coordinated operation of this regime.
This package, sometimes referred to as “Side-by-Side” (SbS), represents an evolution in the implementation of Pillar Two, aimed at increasing international tax certainty, reducing compliance burdens, and protecting local tax bases.
Main components of the package
According to technical reports linked to the OECD communiqué, the main elements of the package include:
- Simplification measures: mechanisms that seek to reduce complexity for multinational groups and tax administrations in determining and reporting the global minimum tax. This includes simpler processes for calculating the effective tax rate and reporting this information.
- Safe harbor mechanisms: introduction of rules that allow certain transactions or tax incentives, such as incentives based on economic substance, to coexist with the minimum tax regime, reducing uncertainty for taxpayers.
- Side-by-side arrangement: this approach recognizes that some countries already have domestic minimum tax regimes that comply with Pillar Two standards. In such cases, these national systems can operate side-by-side with the OECD’s global rules, facilitating their application without creating duplication or additional burdens.
- Protection of local taxing rights: The notion that jurisdictions should retain primacy over their own top-up minimum tax regime in relation to tax bases generated in their territories is reinforced.
These components reflect a balance between the harmonization of international tax standards and respect for the tax sovereignty of each country.
Relevance of the agreement and the OECD’s vision
The OECD Secretary-General stressed that the consensus reached represents an “important step for international tax cooperation” and enhances tax certainty, reduces complexity, and protects tax bases.
The OECD has also scheduled the publication of complementary tools, guidance materials, and webinars to support jurisdictions and businesses in the effective implementation of the package.
Relationship with recent political and economic-fiscal decisions
The OECD agreement does not occur in a political vacuum; it is part of a context of intense multilateral negotiations that face tensions between global tax objectives and national priorities. For example, recent negotiations have led countries such as the United States and organizations such as the G7 to introduce elements of temporary exemption or adaptations, favoring existing domestic systems or seeking to preserve tax incentives relevant to their domestic economy.
This highlights that, while the international community is moving towards greater tax harmonization, geopolitical dynamics, economic competitiveness, and domestic political priorities can significantly influence the form and pace of implementation of rules such as the global minimum tax.
Impact on multinational companies
For multinational groups subject to these rules, the package may have significant implications for their international tax planning and tax compliance obligations. Companies will need to assess how the various safe harbors, simplified mechanisms, and side-by-side schemes affect the calculation of their global effective tax rate, as well as their reporting responsibilities in each jurisdiction where they operate.
In addition, the OECD package may generate additional demand for strategic tax advice, as the revised rules require a thorough understanding of both international requirements and compatible domestic regimes.
Conclusion
The OECD’s recent announcement of an international agreement to move forward with a global minimum tax represents a significant technical development in the field of international tax cooperation. By adopting a comprehensive package that incorporates simplifications, safe harbors, and a “side-by-side” approach, countries seek to consolidate a framework that facilitates compliance, preserves tax sovereignty, and reduces complexity for multinational groups.
This agreement implies that global tax rules continue to evolve to address challenges arising from globalization and economic digitalization, and requires companies to adapt to an increasingly structured and coordinated international tax environment.
Expert support in the new international tax environment
The implementation of the global minimum tax introduces significant challenges in terms of tax compliance and transfer pricing for multinational groups. In this context, TPC Group, a company specializing in transfer pricing, provides comprehensive technical advice to assess impacts, manage risks, and ensure alignment with OECD/G20 Inclusive Framework standards. Our team of specialists is prepared to support your organization in adopting sound and sustainable tax strategies in this new regulatory environment.
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