Global minimum tax on corporate profits is going ahead

Significance

Progress was made on the technical details of Pillar 1, the reallocation of taxing rights from host countries to those where a multinational operates, but US opposition has stalled it for the moment.

Impacts

• States courting multinationals with low taxes will apply Pillar 2 softly using the qualified minimum top-up tax and refundable tax credits.
• Multinationals will reduce their presence in tax havens but increase their presence in low-tax jurisdictions.
• Digital services taxes will rise again from 2024 but these are second best to Pillar 1 market country taxation, which will be revived.