Tax Pros Outline Newest Developments in Global Tax Policy
January 13, 2026
On January 5, two days before the D.C. Bar held its 10th annual Tax Conference, the Organization for Economic Cooperation and Development (OECD) announced that 147 countries and jurisdictions have reached an agreement on several crucial provisions of a global minimum tax regime for multinational corporations.
The OECD Inclusive Framework released significant administrative guidance, called the side-by-side package, intended to resolve long-running uncertainty over how the Pillar 2 global anti-base erosion rules will apply to U.S. multinational enterprise (MNE) groups. A new safe harbor will effectively deem the U.S. tax system compliant with Pillar 2 and exempt U.S. MNE groups from certain taxes.
The agreement featured prominently in many of the global tax sessions at the Tax Conference, which also included a fireside chat with Gerassimos Thomas, director-general for the Taxation and Customs Union at the European Commission.
The European Commission serves as the executive branch of the European Union (EU), proposing legislation, negotiating international agreements, and helping enforce EU laws across the 27 member states. Thomas, a Greek national and economist, was appointed to the office in 2020 to oversee the EU’s tax laws and policies.
During the conversation moderated by Scott Levine of Baker McKenzie LLP, Thomas talked about the role of the Taxation and Customs Union and the progress the office has made since he joined, including streamlining the customs process for individuals and entities that arrive in the EU and overseeing the second-largest IT department in the European Commission, ensuring that the tax agencies of member states are connected and sharing data effectively.
Regarding global tax policies, Thomas shared his thoughts on Pillar Two, which ensures that multinational corporations pay proper taxes in the jurisdictions where they do business and that U.S. multinational companies are not overtaxed at home. Thomas said he was glad that there is an agreement among OECD and the United States toward creating a tax deal that is beneficial for all parties.
“It sets the floor in minimum taxation and avoids a race to the bottom on taxation and a race to the top on tax incentives,” Thomas said.
Thomas noted that the agreement required extensive education and negotiation with EU member states on corporate taxation. He added that the next steps for his team and the European Commission involve simplifying tax processes for multinational companies and for domestic affairs.
“Single tax systems are good for the economy,” Thomas said, noting that a big simplification package of added frameworks will be released in the summer of 2026.
Thomas also touched upon digital service taxes, which are taxes levied by countries on tech multinationals, such as Google and Meta, that operate in their jurisdictions. Thomas said the digital economy is not going away and the question of how to broadly tax it sensibly will continue to be an area of discussion.
“There has not been enough consensus to come up with a single model, but a lot of the discussion has been maturing, and if we, as the member states, have the possibility to learn and work on this together at an international level, we will all profit more … taking this issue completely out of the national agenda,” said Thomas.
Panelists Emphasize Consensus Building
Following the fireside chat was a panel discussion featuring several tax policy leaders from the United States and abroad. Panelists included Rebecca Burch of the U.S. Department of the Treasury’s Office of Tax Policy, Manal Corwin of the OECD Centre for Tax Policy and Administration, Martin Klam of the French Ministry of Economy and Finance, and Tim Power of His Majesty’s Treasury of the United Kingdom.
Also moderated by Levine, the conversation covered Pillar Two implementation, safe harbor treatment, and simplifying tax systems, among other topics. Beginning the session, Corwin discussed the implementation of Pillar Two and the initial need for a global tax framework, saying that “success was not guaranteed” and building consensus toward the January development was a slow process.
“Consensus was dependent on the ability to strike that exact right balance of key components in the package,” said Corwin.
Burch highlighted the slow build of consensus and how the United States worked to make sure it was clear on the goals and requirements of the package, as well as the need to build trust among nations. “The mutual trust that we built and gave space for listening to each other and building consensus was invaluable,” said Burch. “You don’t get over 140 jurisdictions in a room to agree to something that is so consequential without trust.”
Power said the agreement was a significant achievement, born out of “sleepless nights and challenging discussions.” He mentioned that finding an ideal situation for all parties was essential, especially during a time of a challenging geopolitical climate.
“Our ministers didn’t want retaliatory measures that would be damaging from a transatlantic trade perspective,” said Power. “They saw a significant opportunity coming to the inclusive framework.”
Klam agreed, stating that France welcomed the new agreement as a milestone for the global minimum tax implementation in Europe.
The panel also covered digital service taxes and how additional discussion is needed on how to proceed in that area, taking into consideration an evolving tech landscape and accounting for elements such as AI.
Looking ahead, Corwin highlighted that communication and continued consensus-building were key to tackling new developments in the tax framework as well as taking time to reflect on the lessons learned.
“It’s important to reflect on [whether] they [are] achieving what they intended. Are they moving in the direction they wanted?” said Corwin. “Are the ways of getting to agreement and the topics we’re choosing to focus on the right ones for the collective interest?”
