Jelena Mihic
Managing Director at Kreston MDM Serbia
Global minimum tax: The U.S. exception
July 14, 2026
In this article for Bloomberg Tax, Jelena Mihic (Kreston MDM and Chair of the Europe Regional Committee) explores how the U.S. exemption from the OECD’s global minimum tax rules could reshape the future of global tax policy. The OECD’s Pillar Two framework introduced a 15% global minimum tax to reduce profit shifting, curb harmful tax competition, and create a more consistent international tax system for multinational groups with revenues exceeding €750 million. Read the full article here, or a summary below.
A changing global tax framework
While the United States shares these objectives through its Global Intangible Low-Taxed Income (GILTI) regime, the two systems differ significantly. GILTI applies a lower effective tax rate and uses a global blending approach rather than the jurisdiction-by-jurisdiction methodology required under Pillar Two. As a result, it does not fully comply with the OECD rules.
Recognising the political challenges of reforming U.S. tax legislation, the OECD has temporarily accepted GILTI as “broadly equivalent.” This pragmatic decision helps maintain U.S. participation in the global framework but moves the initiative away from the uniform model originally agreed in 2021.
Implications for governments and multinational businesses
The U.S. exemption introduces greater flexibility but also creates uncertainty about the long-term consistency of the global minimum tax. Other countries may seek recognition for their own domestic minimum tax regimes, leading to a more fragmented landscape where multiple, interoperable systems coexist rather than a single global standard.
For EU-based multinational groups, the implications are significant. Companies remain subject to the full Pillar Two requirements, including comprehensive GloBE calculations, jurisdiction-specific top-up tax assessments, and extensive reporting obligations. Meanwhile, many U.S. groups continue operating under GILTI without equivalent compliance requirements, creating competitive and administrative disparities.
The evolving framework is also likely to influence investment decisions, as the benefits of locating operations in traditionally low-tax jurisdictions are reduced once top-up taxes apply. Businesses should expect increasing complexity as different countries adopt varying approaches while remaining broadly aligned with OECD principles.
Transfer pricing remains critical
Despite the introduction of the global minimum tax, transfer pricing remains fundamental to international tax planning. Pillar Two calculations continue to rely on transfer pricing outcomes to determine where profits arise and whether additional tax is payable.
Tax authorities are expected to place greater emphasis on economic substance, including DEMPE functions, supply chain design, workforce location, and operational activities. Robust transfer pricing documentation will therefore play an increasingly important role in supporting Pillar Two positions and defending tax outcomes during audits.
Looking ahead, multinational groups should move beyond compliance and adopt an integrated tax and transfer pricing strategy. Organisations that proactively review their operating models, strengthen economic substance, and align transfer pricing with the evolving global tax environment will be best positioned to manage risk and remain competitive as the international framework continues to develop.
