Behind the technical language, the latest OECD/G20 Inclusive Framework announcement tells a fairly simple story: the global minimum tax is moving forward, but not in a fully uniform way — and the United States largely got what it wanted.
The agreement is presented as a package with five components, aimed at making the system workable rather than perfect:
1. Simplification measures
Countries agreed on measures to ease the heavy compliance burden — one of the main criticisms of Pillar Two. For many multinationals, the cost of applying the rules was becoming almost as problematic as the tax itself.
2. Treatment of tax incentives
The package introduces a targeted safe harbour for substance-based incentives. This allows certain investment-linked incentives to coexist with the minimum tax — a feature that aligns particularly well with the US incentive model.
3. New safe harbours for eligible jurisdictions
Additional safe harbours apply to groups headquartered in jurisdictions that meet minimum taxation standards, reinforcing the idea that not all systems need to look the same to be considered acceptable.
4. Evidence-based stocktake
Rather than locking in rigid rules, the OECD introduced a review mechanism to assess over time whether the system delivers a level playing field — relying on ex post evaluation instead of immediate, absolute alignment.
5. Reinforced role of domestic minimum taxes
The package confirms that QDMTTs remain the primary tool for protecting local tax bases, especially in developing countries, further anchoring Pillar Two in national tax systems rather than a single global levy.
What does this mean overall?
Pillar Two is not being abandoned. It is being reshaped into a more pragmatic framework, where different minimum tax regimes can coexist and political realities are openly acknowledged.
The biggest outcome
The OECD’s initial list of “qualified” side-by-side regimes currently includes just one country — the United States.
After sustained pressure from Washington, negotiators agreed on an approach that allows the US tax system to operate alongside Pillar Two, without being overridden by it.
Others may follow. But the message is already clear: the global minimum tax will move forward — just not always on equal terms.
Do you see the side-by-side approach as a necessary compromise to keep Pillar Two alive, or as the beginning of a more fragmented global tax framework?
For more information: daniel.medvedovsky@basefirma.com