Tax News & Views International Weekly: Progress on the Global Tax Front

A new report from the Organization for Economic Cooperation and Development suggests that its recent efforts to overhaul the international tax system—including the 15% global minimum tax—are having an effect.

The report, an annual analysis of corporate tax revenue from around the world, comes at a key juncture for the minimum tax, also known as Pillar Two. The U.S. and the OECD continue to negotiate behind-the-scenes to finalize details for the “side-by-side” agreement announced over the summer, as their self-imposed year-end deadline approaches. Key issues to be worked out include how an exemption for U.S. companies from the Pillar Two taxes would work in practice, and how these rule tweaks could be implemented under the existing European Union directive.

The U.S. has long maintained that its taxpayers should not be subject to the global minimum tax, because they are already subject to U.S. taxes on foreign income. Other countries have been implementing the new tax regime since an agreement was announced in 2021.

Pillar Two has sometimes divided participants on its true goal—whether it’s to prevent tax avoidance through on-paper income-shifting, or to disincentive countries from competing for investment by continually lowering taxes. The OECD’s recent report indicates there has been modest success on both fronts. Both statutory tax rates and effective tax rates have remained steady in 2024-25, after years of a downward trend, according to the OECD. And indicators of base erosion and profit shifting, such as the ratio of profits to employee in “investment hubs,” have decreased, although the OECD notes that the COVID pandemic could skew some of that data.

This release, along with a recent analysis of the OECD’s 2015 BEPS project, shows how the global tax landscape has been shifting during the 2020s—likely due to several factors. Along with the OECD’s initiatives, there has been increased public and media scrutiny on multinational tax practices, which may affect planning decisions.

Noteworthy Items This Week

Global Tax Deal Tweaks Not Ideal but Workable, OECD Official Says – Somesh Jha, Bloomberg Tax ($):

The US has longstanding concerns—some of which predate the Trump administration—with certain design features of the global minimum tax that it says would lead to a discriminatory outcome, John Peterson, head of the cross-border and international tax division at the OECD’s Center for Tax Policy and Administration, noted. He was speaking at the International Tax Italian Conference 2025.

Referring to the US push for a global tax framework that sits alongside its own tax system, Peterson said, “I am not happy to be working on a side-by-side system, and that’s because we have a system in place with the global minimum tax rules.”

US Must Reopen Trade Probe Into French Digital Tax, GOP Says – Lauren Vella, Bloomberg Tax ($):

A group of Republican lawmakers on Tuesday called for the Trump administration to reopen its trade investigation into a French tax on digital services.

“This is not a routine French tax matter; it is a targeted escalation against American businesses,” the lawmakers wrote in a letter addressed to President Donald Trump shared with Bloomberg Tax.

Academics Still Not Convinced Pillar 2 Changes Fit in EU Rules – Elodie Lamer, Tax Notes ($):

The European Commission recently said that the side-by-side system being negotiated at the OECD could be implemented through article 32 of the pillar 2 directive. Article 32 says that EU member states “shall” treat a group’s top-up tax as zero in a given jurisdiction that meets the conditions of a qualifying international safe harbor agreement. Academics and several EU countries expressed doubts about this approach, while scholars and practitioners expressed concerns for the rule of law.

Then a question would arise, according to de Wilde: Is the side-by-side arrangement actually self-binding? It is secondary EU law, and if it is self-binding, how does it relate to primary EU law? This would immediately bring up nondiscrimination claims, de Wilde said, such as whether the EU legislature can effectively introduce state aid for American companies.

Potential Tax Policy With the U.S. G20 Presidency on the Horizon – Nana Ama Sarfo, Tax Notes ($):

Increasingly, the White House is becoming frustrated with the state of global financial policy. In April Treasury Secretary Scott Bessent criticized the IMF and World Bank for maintaining “sprawling and unfocused agendas” on issues like climate change and social issues, saying that “mission creep has knocked these institutions off course.” Bessent cares because the United States wants to expand its economic leadership and its participation in international financial institutions, he said.

“America First does not mean America alone. To the contrary, it is a call for deeper collaboration and mutual respect among trade partners,” Bessent said. “By embracing a stronger leadership role, America First seeks to restore fairness to the international economic system.”

How Do Russian Oligarchs Hide Money? Wrap It in Insurance – Chandra Wallace and Lauren Loricchio, Tax Notes ($):

PPLI policies are sometimes referred to as insurance wrappers and can help protect assets held by companies connected to those individuals. While they can be legitimate tools for financial planning, PPLI policies can also be used to obscure the origins of assets and evade and avoid taxation by the United States and other countries.

The size of these life insurance policies provides insight into the overall size of the offshore PPLI market, which isn’t fully understood yet, said Andrew Granato of Yale Law School and Yale School of Management.

“If there’s more than even just a few more policies like this, then the offshore market very quickly starts to dwarf the . . . American onshore market,” Granato said.

Public Domain Superhero of the Week

Every week, a new character from the Golden Age of Comics, who’s fallen out of use.

This week’s entry: The Black Hood

Debut Year: 1940

Debut Publication: Top-Notch Comics #9

Origin Story: After being framed and fired for a crime he didn't commit, a police officer was trained by an old hermit to become a masked crime-fighter.

Superpowers: Like many pulp heroes, he has all the power he needs in his fists.

Eide Bailly's International Tax Team and our affiliates at HLB, The Global Advisory and Accounting Network, stand ready to assist with your worldwide tax needs.

Tax News & Views International Weekly: Progress on the Global Tax Front

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Alex Parker