Global Tax Reforms Impacting International Business in 2026
OECD/G20 Two-Pillar Reform — Pillar Two (Global Minimum Tax)
Under the OECD/G20 Inclusive Framework, a 15% global minimum corporate tax is being increasingly implemented in jurisdictions around the world.
Many countries are enacting domestic rules consistent with the OECD’s “GloBE” (global anti-base erosion) model rules: e.g., the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR).
Safe harbors: Two additional safe harbors have been agreed under Pillar Two. One is a transitional UTPR safe harbor (no top-up tax in certain cases) which defers some obligations until 2026.
Some countries are rolling out Qualified Domestic Minimum Top-up Taxes (QDMTT): this allows companies to compute a domestic top-up instead of triggering IIR or UTPR in foreign jurisdictions, under certain conditions.
Country-specific implementation:
Taiwan: intends to introduce a 15% global minimum tax for large multinationals from 2026.
Malta: has transposed the EU Pillar Two directive, but deferred the application of IIR and UTPR until end-2029.
Implications for MNEs: Firms with global revenue above the threshold (typically €750 million) will need to prepare for additional top-up tax liabilities, more complex compliance, and possibly restructuring to optimize tax outcomes across jurisdictions.
OECD/G20 Two-Pillar Reform — Pillar One (Reallocation of Profits)
The OECD published a new multilateral convention (MLC) to implement Amount A of Pillar One, which reallocates a portion of the profits of the largest and most profitable multinationals to market jurisdictions, regardless of physical presence.
This is especially relevant for highly digitalized or consumer-facing multinational enterprises: governments where the customers are located (rather than where the company is based) will gain more taxing rights.
Country-Level Tax Rate Changes & Surcharges
According to the OECD’s Tax Policy Reforms 2025 report, several jurisdictions are making changes that will affect business taxation in 2026:
Estonia: The corporate income tax rate is set to increase (from 22% to 24%) beginning 1 January 2026.
Japan: Introduces a new 4% surtax on CIT liability starting in April 2026, which, after certain deductions, amounts to an effective ~1% extra on CIT beyond JPY 5 million.
These changes could raise the cost of doing business or reduce after-tax returns for foreign investors.
U.S. International Tax Provisions (Post “One Big Beautiful Bill Act”)
The U.S. passed the One Big Beautiful Bill Act (OBBBA) in July 2025. This law modifies several international tax provisions, making permanent certain rules and altering others.
Key changes:
Adjustments to GILTI (Global Intangible Low-Taxed Income): under the OBBBA, the effective rate is more favorable than what was previously scheduled for 2026.
According to the Tax Foundation, absent the new law, top GILTI/FDII rates would have risen in 2026 (GILTI to ~16.4%, for example).
Also, the BEAT (Base Erosion and Anti-Abuse Tax) rate is set to increase (from 10% to 12.5%) in 2026, per U.S. tax policy analysis.
For international businesses with U.S.-based operations or U.S. parent companies, these changes could materially affect tax planning, repatriation decisions, and the evaluation of foreign subsidiaries.
New or Expanded Surtaxes / Special Taxes
Some countries are introducing special surcharges to raise additional revenue: e.g., the Estonia “security tax” was originally intended but then altered; see above.
Defense-related or extraordinary taxes: According to OECD, some jurisdictions are using corporate surcharges (or new taxes) to fund defense.
These kinds of taxes may catch multinationals by surprise if not well anticipated, particularly those with large in-country operations.
Risks & Challenges for Multinationals
Increased Compliance Burden: The combination of Pillar Two top-up taxes, QDMTT computations, and new reporting regimes (especially for Pillar One) means more data collection, more complex tax returns, and potentially higher administrative costs.
Tax Liability Exposure: Companies may face unexpected incremental tax liabilities (top-up tax) in jurisdictions where their effective rate falls below the minimum.
Strategic Restructuring: MNEs may reconsider their operational footprints, financing structures, or profit allocation strategies to mitigate tax costs under the new global rules.
Cash Flow Impacts: Additional taxes or higher rates may have cash flow implications, especially in jurisdictions that phase in changes or have delayed safe harbors.
Uncertainty and Divergence: While OECD provides model rules, countries may implement them differently (e.g., with different safe harbors, QDMTT designs, or timing), creating a patchwork of rules and tax risk.
Opportunities & Strategic Considerations
Tax Planning & Optimization: With the new rules, companies that proactively model and plan may find opportunities to optimize via local top-up tax elections, use of safe harbors, or reorganizing operations.
Use of Incentives: Where countries introduce domestic top-up taxes (QDMTTs), there may still be incentives (e.g., R&D credits, employment credits) to offset some of the burden.
Competitive Advantage: Firms that navigate compliance smoothly may gain a competitive edge, especially relative to smaller players or those slower to adapt.
Engagement with Tax Authorities: Early dialogue with tax authorities, plus participation in consultations, may help shape favorable interpretations or implementation choices (e.g., design of QDMTTs).
Risk Management: Multinationals will need to integrate tax-risk assessments more tightly into their overall business strategy (investments, financing, M&A).
Outlook & Key Watching Points
Pillar One Finalization: While Pillar Two is already in force in many places, the full implementation of Pillar One (Amount A) remains in progress — companies should monitor the adoption of the MLC and related domestic legislation.
Safe Harbor Expiry: Some transitional safe harbors expire or change in 2026 — firms need to track these carefully.
Jurisdictional Divergence: Not all countries will implement the OECD rules identically. Tax-planning strategies must be jurisdiction-specific.
Policy Risk: Political shifts (e.g., changes in government, fiscal pressure) could lead to further tax reforms, especially as revenue projections from minimum tax rules become clearer.
Audit Risk: With new rules come new tax audit risks. Multinationals should gear up for potentially heightened scrutiny by tax authorities.
Bottom Line
2026 will be a critical year for many multinational enterprises: the OECD’s Pillar Two rules will be in fuller effect, and country-specific rate changes or surcharges will crystallize.
Companies that proactively adapt — by updating their tax models, engaging with local authorities, and embedding compliance processes — will be best positioned to manage risk and capitalize on opportunities.
Ignoring or underestimating these reforms could lead to material tax surprises, increased costs, and strategic disruption.