economy
In 2024, more than 130 countries began enforcing a landmark OECD deal aimed at stopping multinationals from shifting profits to tax havens, no matter where a company places its headquarters.
Pillar Two sets a global minimum effective corporate tax rate of 15% for large multinationals, meaning if profits in a country are taxed below that, the company's home country can collect the difference. This removes much of the incentive to shift profits on paper into low-tax jurisdictions, since savings gained that way can be clawed back elsewhere.
A 10% rate would be lower than actually agreed, leaving more room for profit shifting. A 25% rate would be considerably higher than the negotiated floor, closer to some countries' standard rates rather than this deal's minimum.
Getting over 130 countries to agree on a shared minimum tax was a remarkable achievement, requiring nations with very different tax systems, including traditional havens, to accept limits on taxation, a policy long guarded as fully sovereign.
economy
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