28 Countries Tell the OECD “Not So Fast” on a U.S. Carve-Out
The Big Picture: The ink on the OECD’s 15% global minimum tax isn’t even dry, yet 28 countries are already bristling at a draft exemption sought by Washington. If the carve-out sticks, the U.S. could sidestep parts of Pillar Two, undermining the whole minimum in minimum tax, critics say.
The Details: A leaked memo reviewed by International Tax Review shows a coalition of advanced and developing economies lining up against the proposal. China went the furthest, calling the exemption a “violation of the principle of fair competition,” according to the same report. While the U.S. argues its existing Global Intangible Low-Taxed Income (GILTI) rules already meet Pillar Two goals, for more on shifting global policies, see International Tax Landscape Shifts: Digital Services, India Reforms, and US Policy Changes. Rivals say an exemption would give American multinationals a leg-up just as the 15% floor is set to bite in 2026.
Why It Matters: The reaction was swift. Tax officials worry the carve-out could trigger a domino effect of copy-cat exemptions, gutting revenue gains that governments have penciled into 2026,27 budgets. One European negotiator told ITR the fight “goes to the core of whether Pillar Two has teeth or is just another PowerPoint.”
Around the Tax World
• KPMG shuffles the policy deck. The Big Four firm tapped veteran Beijing partner Conrad Turley as its new global tax policy head, aiming to “help clients navigate unprecedented change,” International Tax Review reports.
• Europeans warm to ‘soak-the-rich’ taxes. A new Euronews poll finds more than 70% of respondents in Spain, France, and Greece support higher levies on fortunes above €50 million.
• Trump targets digital levies, again. Former President Donald Trump threatened tariffs on countries with a digital services tax, calling the regimes “discriminatory,” according to The Washington Post. For further context, see Trump Tariffs Shake Global Tax Landscape as Tech Innovation Transforms Industry.
• Duty-free small parcels? Done. The U.S. $800 “de minimis” import exemption expires Friday, meaning online shoppers face tariffs of 10%,50%, ABC News notes.
By the Numbers
Prime Number: 28, the tally of countries that lodged formal complaints over the proposed U.S. Pillar Two exemption, per International Tax Review.
Looking Ahead
OECD officials have yet to comment publicly, but all eyes are on the next Inclusive Framework meeting later this quarter, where the fate of the U.S. carve-out and the credibility of the 15% floor will be on the table. For a closer look at domestic reform readiness, refer to Presidential Committee Hosts Tax Reforms Workshop: Are We Ready?.
Prepared by MyTax - mytax.com.ng