The Conversation
In October 2021, 136 countries agreed to establish new tax rules requiring large multinational companies to pay at least 15% in corporate tax. Nearly four years later, this ambitious agreement is finally being implemented around the world, but its success faces big challenges.
The Organisation for Economic Cooperation and Development (OECD) tax framework aims to end the so-called race to the bottom, where corporations pit countries against each other to pay less tax and shift profits to jurisdictions with lower tax rates.
In the second part of The 15% solution from The Conversation Weekly podcast, we examine progress towards implementing the global tax deal.
The OECD’s two-pillar system fundamentally changes how multinationals are taxed. Pillar One determines where companies pay taxes. Pillar Two establishes how much they must pay: a minimum of 15% for any multinational with yearly revenues above US$850 million. The innovative aspect of the system is that it is self-enforcing. If a company pays less than 15% in any country, other nations where it operates can charge a supplementary tax to meet that minimum.
However, implementation faces significant obstacles. So far around 140 countries have signed up. President Donald Trump withdrew the US from the negotiations in February 2025. China supports the framework in theory but is slow to fully implement it. And some low- and middle-income countries have also not signed up, citing technical complexity or bias toward higher-income countries.
Martin Hearson, a research fellow at the Institute of Development Studies in the UK, explains that for countries with fewer legal and administrative resources, even good rules can be counterproductive due to their complexity. This has led some countries to look for alternatives, including a new UN Framework Convention on International Tax Cooperation, for which negotiations began in February 2025.
Despite these challenges, the OECD expects that approximately 80% of profits previously taxed at low rates will now be appropriately taxed.
Listen to part two of The 15% solution on The Conversation Weekly podcast. Part one is available here.
This episode of The Conversation Weekly was written and produced by Mend Mariwany. Gemma Ware is the executive producer. Mixing and sound design by Eloise Stevens and theme music by Neeta Sarl.
Newsclips in this episode from DW News, Arirang News, and Bloomberg.
Listen to The Conversation Weekly via any of the apps listed above, download it directly via our RSS feed or find out how else to listen here. A transcript of this episode is available on Apple Podcasts.
This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Mend Mariwany, The Conversation
Read more:
- Why the global tax system needs fixing – podcast
- Corporation tax: why plans to set a global rate are too complicated and need a new approach
- Why taxing big companies at 15% won’t fix the gaping hole in global tax
Martin Hearson's research has been supported by the UK Foreign, Commonwealth and Development Office, the Norwegian Agency for Development Cooperation, the Gates Foundation, the Intergovernmental Group of 24, the World Bank, the UN Department for Economic and Social Affairs, and ActionAid International.
