President Trump

Rumours of the death of Pillar 2, the OECD’s global minimum tax, appear to have been exaggerated, but the international, rules-based order may be discovering its limits, says Tim Sarson

Businesses across the globe welcomed in 2026 with the news that the Organisation for Economic Co-operation and Development (OECD) had published the long-awaited update to the 15 per cent global minimum tax, known as Pillar 2, and a new ‘side by side’ system that exempts the US from the rules.

This is important because it will shape how multinationals will be taxed on their global profits for the foreseeable future and define boundaries of cross-border tax competition. And, as in so many walks of life when it comes to geopolitics, we’ve been teetering on a precipice between global consensus and global chaos while waiting to find out the state of play.

In brief, they’ve managed to hold it together. Just.

The world of tax has become another front in the struggle over the so-called ‘International Rules Based Order (IRBO)’, which is now under pressure from the great power politics. What is the “IRBO”? Essentially, it’s those global institutions and standards that, over the decades, countries have built together to support international trade. And, for the most part, they have been adhered to.........

© City A.M.