Policy Backgrounders
Our Privacy Policy has been updated! The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you acknowledge our privacy policy and consent to the use of cookies. 

Policy Backgrounders

CED’s Policy Backgrounders provide timely insights on prominent business and economic policy issues facing the nation.

Update on Global Minimum Tax

May 30, 2024

Trusted Insights for What’s Ahead™

In 2021, the Organization for Economic Cooperation and Development (OECD) led an effort to develop a global minimum tax regime that produced a consensus framework on international tax policy to which 145  economies have agreed. International adoption of the rules has been slower than expected, although significant portions of the new system have come into effect in Australia, Canada, the European Union (EU), the United Kingdom (UK), Japan, South Korea, Singapore, and elsewhere. The President proposed to adopt certain aspects of the framework in his Fiscal Year (FY) 2025 Budget, but opposition to the global minimum tax and other elements of the framework remains strong in Congress.

  • The OECD’s framework consists of two pillars: Pillar One adjusts where multinational enterprises pay taxes to align with the source of a company’s revenue (i.e., where a company’s goods or services are consumed as opposed to manufactured or the location of a multinational company’s headquarters); Pillar Two introduces a 15 percent global minimum tax along with provisions regarding taxable income, deductions, and a “top-up tax.”
  • Implementation of Pillar One has been slow, though the EU and major economies in Asia including Japan and South Korea have adopted many elements of Pillar Two.
  • The US has not implemented any portion of the OECD’s framework. The President seeks to adopt the global minimum tax and the undertaxed profits rule in his FY2025 Budget, but strong opposition from Republicans in Congress makes adoption highly unlikely.

Authors

hubCircleImage