A PDF version of this publication is attached here: The OECD minimum tax: What US companies need to know (PDF 624kb)

The current international tax landscape has been in place for decades. But now dramatic changes may be on the horizon. The Organisation for Economic Cooperation and Development (OECD), backed by countries around the world, has been pursuing a “Two-Pillar Solution” aimed at alleviating certain global tax challenges that it believes arose from the “digitalisation of the economy.” This OECD two-pillar framework will significantly alter many international tax practices we follow today with a related impact on reported earnings. In preparation, all companies should begin to assess what the OECD’s proposed framework will mean to them.

In their simplest terms, Pillar 1 would change where sales to customers in other jurisdictions are taxed. Pillar 2 proposes a global minimum tax assessed for each jurisdiction where a multinational company operates. The ease with which the model can be described belies the complexity of its application and potential impact.