Global Tax Shake-Up: Multinationals Race To Re-Price Their Profits
The world’s biggest companies woke up this week to a brand-new rulebook. The OECD’s 15% global minimum corporate tax is now live, and tax teams from Seoul to San Francisco are scrambling to keep profits , and headaches , in check.
“Industries that historically relied heavily on intangible assets… are facing some of the steepest adjustments,” IBT reported, noting that tech, pharma, and finance giants could see effective tax rates jump by “several percentage points.”
Behind the scenes, transfer pricing , the price tags multinationals put on cross-border trades with their own subsidiaries, is the pressure point. The Korea Times calls it “one of the most complex issues in international taxation,” pointing out that a Korean subsidiary paying $100 for a component another local firm buys for $80 sets off every auditor’s alarm. Korea’s National Tax Service is beefing up a “global network” of tax authorities to police such gaps.
Gulf Cooperation Council nations are also tightening the screws. While oil revenues once cushioned budgets, GCC states are now “internalising transfer-pricing norms” to align with Pillar Two, International Tax Review writes.
The reaction was swift: CFOs are reviewing intellectual-property locations, spinning up regional hubs, and lobbying for carve-outs. As IBT summed it up, the shift is “not only a compliance issue but also a strategic challenge.”
Around the Tax World
• Finland’s charm offensive: Helsinki plans to slash its corporate tax rate from 20% to 18% in 2027 and extend loss carry-forwards to 25 years to lure tech investors.
• Estonia keeps the crown: For the 12th straight year the Baltic state tops the Tax Foundation’s OECD ranking, thanks to its 20% tax on distributed profits and dividend exemptions.
• UK advisory boom: Accounting network MHA says demand for cross-border tax advice helped push its tax revenues up 17% year-on-year (International Tax Review).
• GCC gears up: Transfer-pricing regulations are moving from paper to practice across Saudi Arabia, the UAE, and Qatar as they prepare for the OECD rules (International Tax Review).
By the Numbers
Tax Stat of the Day: 15%, the new global minimum corporate tax rate every large multinational must pay, no matter where profits land (IBT).
Looking Ahead
All eyes now turn to year-end financial statements. Multinationals have just weeks to true-up transfer-pricing policies before auditors, and a newly coordinated league of tax authorities , come knocking.