OECD’s "Pillar Two-Point-Oh" , A Softer Landing for U.S. Multinationals
The Big Picture: The Organisation for Economic Co-operation and Development is passing around a fresh draft of the global minimum tax,and it reads like a love letter to Washington. A 30-page proposal dated Aug. 13 outlines carve-outs that could spare U.S. multinationals from some of the regime’s toughest enforcement hooks, Bloomberg Tax reports.
The Details: The draft,circulated inside the OECD’s Working Party 11,explains in plain English how the recently renamed Net CFC Tested Income rules and the new 15 percent Corporate Alternative Minimum Tax (CAMT) already rope in offshore profits. Companies whose foreign earnings are "already subject to robust taxation" could be exempt from the treaty-wide Income Inclusion Rule or Undertaxed Profits Rule. For further insights into evolving global tax policies, see our article International Tax Landscape Shifts: Digital Services, India Reforms, and US Policy Changes. Translation: if Uncle Sam has grabbed his slice, other countries may have to back off.
U.S. officials have long argued the domestic system is “robust” enough. The proposal nods to that stance, describing a possible “side-by-side” framework that treats the U.S. regime and Pillar Two as parallel rather than stacked. One nugget sure to raise eyebrows: OECD economists estimate U.S. effective rates on foreign income could dip by 0.2,0.4 percentage points under the tweaks.
Why It Matters / What They’re Saying: The reaction was swift. Multinationals welcomed the prospect of fewer double-tax headaches, while EU officials privately warned Bloomberg Tax the carve-outs risk "hollowing out" the very floor they spent years negotiating. Tax professionals are watching to see whether a friendlier Pillar Two finally nudges a U.S. ratification,or merely sparks a new round of transatlantic brinkmanship.
Around the Tax World
• Stateside Strategy Shift. The July 4 “One Big Beautiful Bill Act” is forcing U.S. C-corps to rethink nexus, apportionment, and R&D expensing, according to Bloomberg Tax (good news for tax-tech vendors). Further insights on U.S. tax reforms can also be found in Trump Tariffs Shake Global Tax Landscape as Tech Innovation Transforms Industry.
• Africa Ramps Up Teamwork. An ATAF delegation wrapped a four-day visit to Cairo, inviting Egypt to host the 2026 annual meetings and join the African Mutual Assistance in Tax Matters pact (ATAF).
• MAP Backlog in Mumbai. Transfer-pricing disputes resolved through the Mutual Agreement Procedure are taking longer in India than in peer economies, OECD data show, Business Standard reports.
• Indonesia Eyes E-Commerce VAT. Jakarta is tightening rules on digital services in its sweeping VAT overhaul to capture fast-growing online revenue streams (The Jakarta Post).
By the Numbers
Tax Stat of the Day: $1 Billion. That’s the average-income threshold triggering the U.S. 15 percent CAMT spotlighted in the OECD draft,an accounting wrinkle big multinationals can’t ignore (Bloomberg Tax).
Looking Ahead
All eyes now turn to the OECD’s September meetings, where finance ministers will decide whether the U.S.-friendly tweaks survive the political gauntlet. Expect a flurry of technical notes,and maybe a few late-night transatlantic calls,before ink meets paper.
For more on tax reforms from a local perspective, check out our guide on Introduction To Nigerian Tax Laws.
Prepared by MyTax - mytax.com.ng