Levelling the Playing Field: OECD’s Global Minimum Tax Toolkit Goes Live

The Organisation for Economic Co-operation and Development (“OECD”) has just dropped its latest tools to help countries navigate the Global Minimum Tax (“GMT”) framework and it’s a game-changer for tax administrators and multinational enterprises alike. Here’s a breakdown of this release and why it matters.

What’s New?

On 15 January 2025, the OECD dropped a handy toolkit to make managing the GMT a bit smoother. The OECD’s new toolkit is designed to help countries roll out the Global Anti-Base Erosion (“GloBE”) rules under Pillar Two, whereby they seek to ensure that multinational companies pay a minimum effective tax rate of 15% on their global income.

Essentially the Pillar Two means that large multinational enterprises (“MNE”s) will have to crunch the numbers on their income and taxes separately for each country they operate in, and if the effective tax rate (“ETR”) in any of those places falls below 15%, the Pillar Two rules step in and say, “Top it up!”. The intention is that then overall the MNE will pay enough extra tax on its excess profits (that’s GloBE Income minus some exclusions for real economic activity) to hit that 15% sweet spot.

Included in the toolkit release are:

1. Qualified Domestic Legislation Compilation: A handy reference guide showcasing how various jurisdictions have adopted the GloBE rules.
2. Standardised Reporting Tools: The toolkit includes an update to the GloBE Information Return (“GIR”), along with a new XML schema and a Multilateral Competent Authority Agreement. These are just fancy new templates and shiny procedures for easier filing and exchanging tax information across borders. Think of it as the ultimate cheat sheet for navigating the complexities of the GMT.

Why It Matters:

For tax authorities, these tools ensure consistency and transparency, making it easier to enforce the rules without getting lost in the paperwork jungle. For businesses, it means a clearer path to compliance — and hopefully fewer headaches when it comes to filing and reporting.

It also signals a shift towards greater global cooperation in tax administration, aiming to close the gaps exploited by base erosion and profit-shifting practices. The tools provide a clear roadmap, ensuring that all parties play by the same rules and reducing the potential for disputes.

What’s Next?

As countries gear up to implement the GMT, the OECD’s toolkit will play a critical role in ensuring a smooth transition. For now, businesses and tax administrators can breathe a little easier knowing they have a roadmap to navigate this complex terrain.

One thing is certain: the global tax landscape continues to evolve rapidly with tax authorities opting to join hands, share information and make actionable changes to fight profit shifting. Remember dearest reader, when it comes to international tax compliance, preparation is half the battle won! Stay informed and compliant with the latest developments in global taxation. Reach out to us for more insights and tailored solutions for your business. Our team of experts are ready to assist your organisation in navigating the ever-evolving tax landscape.

Meet the author

Glen Groenewald

Glen is part of the Transfer Pricing team at Regan van Rooy. He is based in Cape Town and can be contacted at [email protected]