OECD signals next steps on Pillar Two, Global Mobility and Inequality at G20 Finance Ministers Meeting

Ahead of the third G20 Finance Ministers' and Central Bank Governors' meeting under the South African G20 Presidency on 17-18 July 2025, OECD Secretary-General Mathias Cormann provided a tax report outlining notable developments in international tax cooperation. 

The report emphasises several matters including the Two-Pillar Package, the implementation of BEPS Minimum Standards, Global Mobility, Tax Policy & Statistics, Tax & Development, Tax, Inequality & Growth as well as the work on Transparency and Exchange of Information for Tax Purposes. 

Perhaps the most awaited reference in the report was related to the future of Pillar Two Globe Minimum Tax in light of the G7 statement concerning the side-by-side approach in respect of US tax legislation. In this respect, the report highlights that future work must be undertaken in the Inclusive Framework arena while enhancing the importance of Qualified Domestic Minimum Top-up Taxes (QDMTTs): 

"At the end of June, the G7 issued a statement of understanding about a proposed "side-by-side" arrangement that could preserve gains and provide greater stability in the international tax system. Crucial to the understanding was the removal of the proposed section 899 in order to provide a more stable environment for discussions to take place among the full Inclusive Framework membership. Importantly, the understanding – which was informed by analysis of the respective minimum tax regimes and the success and impact of Qualified Domestic Minimum Top-up Taxes (QDMTTs) which would remain applicable to multinationals from all jurisdictions". 

Equally significant was the reference to a future potential safe harbour for Pillar Two, which stakeholders are eagerly awaiting: "The Inclusive Framework is working on a simplified effective tax rate calculation that could be incorporated into a safe harbour and that would allow MNE Groups to demonstrate that they have a high effective tax rate, avoiding the need for extensive or complex calculations". 

Apart from Pillar Two Global Minimum Tax, one other relevant reference in the report is the expected work on Global Mobility, an area that has increased in importance with the pandemic and which has been generating important international tax controversies. The document mentions that: "The Inclusive Framework agreed to commence work on the global mobility of individuals. This is intended to ensure that tax rules do not pose an obstacle to the opportunities that these changes present (for example, opportunities for businesses to attract talent to drive growth), and to assess possible risks to the tax base." 

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