2026 Trends: Global Minimum Taxation

In 2026, international taxation is undergoing a major transformation with the implementation of OECD Pillar Two, imposing a minimum effective tax rate of 15% on multinationals with annual revenue exceeding 750 million euros. More than 137 countries are participating in this framework, designed to combat aggressive tax optimization practices.

Key points:

• Progressive minimum rate: 15% in 2024, 16% in 2025, and 17% starting in 2027.
• Main mechanisms:
  • QDMTT: Local collection of top-up tax.
  • IIR: Collection by the parent company.
  • UTPR: Rule of last resort.
• Transitional rules: The “Safe Harbour” temporarily simplifies compliance until the end of 2027.
• Administrative challenges: Complex management, as in Belgium with extensive obligations and six-year audits.

Countries such as France and Switzerland are adopting varied strategies to maximize tax revenues, while the United States is taking a more independent stance, sparking debates about the fairness of the global system.

What to remember:

Companies must adjust their accounting systems and review their tax incentives to avoid unexpected taxes. This new framework is redefining global tax priorities, favoring real economic activity while limiting artificial profit shifting.

Developments in Global Minimum Taxation in 2026

The OECD’s “Side-by-Side Package” and the transitional rules

On January 5, 2026, the OECD formalized the “Side-by-Side Package,” a framework designed to align Pillar Two with existing tax regimes, particularly that of the United States. This package introduces several mechanisms that significantly change the way the global minimum tax is applied.

One of the main new features is the Simplified ETR Safe Harbour, a permanent mechanism allowing multinationals to use a simplified calculation based on their consolidated financial statements. If their simplified effective tax rate reaches at least 15%, no top-up tax is due. Unlike the transitional CbCR-based Safe Harbour, this version allows data aggregation at the jurisdictional level.

“The introduction of a permanent Safe Harbour based on the simplified ETR aims to address a major business concern by substantially reducing the compliance burden associated with the global minimum tax.”

• OECD Secretariat

In addition, the transitional CbCR Safe Harbour has been extended to include fiscal years beginning before December 31, 2027, with the required effective rate increased to 17% for the year 2027. This extension gives companies an additional year to adjust their systems before moving to the permanent rules.

The Substance-Based Tax Incentive (SBTI) Safe Harbour allows certain tax incentives to be treated as “Covered Taxes,” provided they meet criteria related to economic substance. The SBTI cap is defined as the higher of 5.5% of payroll costs and depreciation of tangible assets, or 1% of the carrying value of tangible assets.

Finally, the Side-by-Side Safe Harbour exempts certain groups from the application of the IIR and UTPR if their parent entity is located in a qualified jurisdiction. To qualify, a jurisdiction must apply a nominal rate of at least 20% and a QDMTT of at least 15%. In January 2026, only the United States appeared in the central registry as having a “Qualified Side-by-Side Regime.”

These measures encourage companies to review their accounting systems in preparation for the necessary adjustments.

Impact of Extended Transitional Measures on Corporate Tax Planning

The extensions of the transitional rules are reshaping multinational tax strategies. In 2027, companies will have to choose between the transitional CbCR Safe Harbour (17%) and the permanent Safe Harbour based on the simplified ETR (15%). This choice will require in-depth analysis to identify the most advantageous option from both tax and administrative perspectives.

The transition to the permanent Safe Harbour requires accounting systems to aggregate data by jurisdiction, based on consolidated financial statements. Tax departments must quickly adapt their tools to take advantage of this flexibility.

For U.S. groups, the Side-by-Side Safe Harbour represents a major advantage in 2026, allowing them to avoid the IIR and UTPR in other jurisdictions. However, this raises questions:

“How can a tax be described as ‘global’ if the world’s leading economy remains structurally outside its effective scope of application?”

• Geoffroy Galéa

Finally, companies will need to review their current tax incentives to ensure compliance with the SBTI Safe Harbour criteria. A thorough analysis is essential to avoid unexpected taxation. The OECD plans a global assessment of these measures by 2029.

Country-by-Country Effects and Revenue Projections

France’s Compliance and Tax Outcomes

France adopted the Pillar Two rules through the 2024 Finance Act, establishing a minimum tax rate of 15% for groups with revenue exceeding €750 million. Thanks to this transposition, France can apply the QDMTT (Qualified Domestic Minimum Top-up Tax) to collect the top-up tax directly, thereby preventing other jurisdictions from collecting it. This mechanism is part of a strategy aimed at limiting the artificial shifting of profits between countries.

French implementation is strictly aligned with European directives. However, other major regions, such as the United States, are exploring more flexible approaches, which is fueling debate over the potential impact on the competitiveness of European companies.

At the same time, Switzerland illustrates a different approach to applying these new tax rules.

Swiss Tax Revenues Below Forecasts

Following a popular vote in 2023, Switzerland introduced the global minimum tax. However, the revenue generated has been lower than expected, mainly بسبب the extensive use of safe harbours. Just like in France, the aim of this implementation is to adjust tax strategies in response to new international standards.

Swiss cantons, for example, use the SBIE (Substance-Based Income Exclusion) to partially reduce taxable profits, taking into account tangible assets and payroll costs. By the end of 2023, more than half of the cantons were evaluating or implementing subsidies to offset the loss of tax flexibility.

Canton	2024 Tax Strategy	Impact on Revenue/Attractiveness
Schaffhausen	Introduction of progressive rates; profits > CHF 15 million taxed at 15%	Increases direct revenues while protecting small businesses
Geneva	Increase from 14% to 14.7%; abolition of the municipal business tax	The higher ETR reduces top-up tax and deductibility improves cash flow
Zug	Maintenance of low rates (around 11.85%) but introduction of direct subsidies	Lower initial revenues; use of additional revenues to support companies
Zurich	Reduction from 7% to 6% (cantonal level)	The ETR remains > 15% thanks to federal layers, with minimal Pillar Two impact

The Swiss example shows that the global minimum tax does not eliminate tax competition. It transforms it: instead of competing on rates, jurisdictions now focus on subsidies and qualified tax credits.

U.S. Policy and Global Compliance Challenges

Exemptions for U.S. Multinationals

In January 2025, Donald Trump decided to withdraw the United States from the Pillar Two tax agreement. Starting in 2026, U.S. multinationals obtained an exemption, being subject only to domestic taxes such as GILTI or BEAT, and escaping the international GloBE framework. The U.S. Treasury Department confirmed this position by stating: “Companies headquartered in the United States will be subject only to U.S. minimum taxes.”

To secure this exemption, Republican lawmakers threatened to impose surtaxes targeting foreign companies operating in the United States. In June 2025, the G7 officially endorsed this approach, which the U.S. Treasury described as a “historic victory” for U.S. tax sovereignty.

In January 2026, the OECD introduced in its “Side-by-Side Package” a safe harbour mechanism (Side-by-Side Safe Harbour), recognizing the United States as an eligible jurisdiction. This compromise allows U.S. groups to avoid certain international tax rules, creating a system in which U.S. companies benefit from lower administrative and tax burdens than their global competitors.

However, this exemption, while protecting U.S. tax sovereignty, raises questions about the coherence and fairness of the international tax consensus.

Political Challenges to the OECD Consensus

The Trump administration criticized Pillar Two, arguing that it harmed the competitiveness of U.S. businesses. It was particularly opposed to the Undertaxed Payments Rule (UTPR), deemed too extraterritorial. For its part, the OECD described these adjustments as a “major political and technical compromise” to preserve the stability of the global tax system.

Geoffroy Galéa, partner at Fieldfisher, pointed out that a minimum tax loses its global character if a major economic power like the United States is partially exempt from it. Pascal Saint-Amans, former OECD tax director, also criticized this decision, stating: “We are seeing Donald Trump’s imperialist logic again.”

These divergences heighten tensions around the transitional rules and weaken the unity of the consensus established by the OECD in 2021, which included nearly 140 signatory states. This fragmentation could encourage other major economies, such as India or China, to demand similar exemptions, further complicating the implementation of the international tax framework.

Future Trends in Global Minimum Tax Policy

Expected Refinements to GloBE Mechanisms

As part of the OECD’s project to establish a global minimum tax of 15%, several technical adjustments are planned to simplify the application of the GloBE rules after 2026. Starting in 2027, groups will have the choice between the transitional Safe Harbour, based on country-by-country reporting, and a new simplified rule based on an effective tax rate (ETR) test calculated from consolidated financial statements.

Another key mechanism, introduced from January 2026, is the Safe Harbour for substance-based tax incentives (SBTI). This mechanism protects tax credits linked to real economic activities. Companies will need to examine whether their current tax incentives meet the SBTI criteria in order to avoid possible additional taxes.

The administrative management of these new rules remains a major challenge. In Belgium, for example, a 403-page circular imposes strict administrative centralization. Each group must appoint a General Representative responsible for centralizing communications, with a requirement for electronic filing via secure platforms. In addition, many multinationals are investing in automated software capable of managing the roughly 100 data points needed to calculate the ETR at the jurisdictional level.

These technical developments foreshadow profound changes in the dynamics of international tax competition, which we will explore in the next section.

Long-Term Effects on International Taxation

The introduction of a 15% minimum tax rate is redefining the rules of global tax competition. Countries can no longer rely solely on low tax rates to attract investment. From now on, the quality of infrastructure and legal stability become decisive factors, while multinationals adjust their value chains to avoid ETRs below 15%. This new environment leads to a redistribution of tax bases in favor of jurisdictions where real economic activity is located or where parent companies are established.

For businesses, long-term tax planning will focus more on qualified incentives rather than arbitrage between different tax rates. Multinationals are reassessing their global operations to identify jurisdictions where, despite high nominal rates, the ETR could fall below 15%. In this context, grouping activities in higher-tax jurisdictions that offer advantages such as access to qualified talent and a stable economy is becoming a preferred strategy.

However, the Side-by-Side system, which mainly benefits U.S. groups, creates asymmetry in the application of the rules. This raises questions about the durability of the global consensus. As Geoffroy Galéa, partner at Fieldfisher, points out, this situation calls into question the universality of the minimum tax:

“Can a minimum tax truly be described as ‘global’ if the world’s leading economic power remains partially shielded from it?”

Global Minimum Tax: Understanding the Overall Agreement on a Side-by-Side Solution

Conclusion: Key Takeaways for 2026 and Beyond

The year 2026 marks a key moment with the introduction of the 15% global minimum tax. This change, illustrated by the Belgian 403-page circular, highlights the administrative complexity that multinationals must face. These companies must now manage an impressive amount of data for each jurisdiction, which pushes them to invest in automated systems and quickly identify any gaps in their information.

In this context, transitional Safe Harbours represent a valuable temporary solution. In January 2026, the OECD extended the use of the Safe Harbour based on country-by-country reporting until fiscal years beginning on December 31, 2027. Starting in 2027, the minimum effective tax rate will rise to 17%. This transitional period gives companies time to adjust their systems before the full application of the GloBE rules. Still, the time available to adapt remains limited.

Despite these adjustments, inequalities in the application of the rules remain, as shown by the Side-by-Side mechanism. This asymmetry raises questions about the fairness of the tax system:

These disparities could not only influence international competitiveness, but also weaken the global consensus in the long term.

In such a complex environment, turning to specialized experts becomes essential. Compliance costs remain high, even when companies do not have additional tax to pay. It is not just a matter of mastering technical rules, but also of anticipating regulatory changes and reorganizing operational structures. StanTax offers tailored tax solutions to help multinationals adapt and navigate this constantly evolving tax landscape effectively.

FAQs

Am I affected by OECD Pillar Two?

OECD Pillar Two introduces a 15% global minimum tax, specifically designed to target large multinationals and limit tax avoidance. If your company belongs to a multinational group with annual revenues exceeding 750 million euros, these new rules probably apply to you.

In France, this regulation will apply from 2024 and will be assessed country by country, which could transform the way companies approach their tax planning. The groups concerned will therefore need to carefully review their strategies to ensure compliance while anticipating the possible impact on their financial results.

How should you choose between the CbCR Safe Harbour and the simplified ETR in 2027?

CbCR Safe Harbour and simplified ETR offer distinct solutions for meeting Pillar 2 requirements, each with its own advantages.

• CbCR Safe Harbour: This option extends country-by-country reporting deadlines until 2027. It helps reduce administrative burdens, especially for companies seeking a more flexible short-term approach.
• Simplified ETR: With simplified tax calculation mechanisms, this alternative aims to reduce the complexity of tax obligations. It may be useful for companies looking to streamline their accounting processes without getting lost in complex calculations.

The choice between these two options will depend on your company’s specific priorities. In France, the regulatory framework surrounding Pillar 2 must also be taken into account in order to align your strategies with local obligations.

What are the risks if my ETR falls below 15% in a country?

Under the OECD Pillar Two rules, if the Effective Tax Rate (ETR) in a country falls below 15%, you may be required to pay a top-up tax. The objective is clear: to prevent tax base erosion and ensure that the global minimum rate is respected. It acts as a safeguard to guarantee fair taxation on an international scale.