A landmark international agreement, finalized by the Organisation for Economic Cooperation and Development (OECD), has been reached by nearly 150 countries to curb the practice of large global companies shifting profits to low-tax jurisdictions. This plan aims to enhance tax certainty, reduce complexity, and protect tax bases worldwide, a development described by OECD Secretary-General Mathias Cormann as a "landmark decision in international tax cooperation."

However, the agreement includes a significant exemption: large US-based multinational corporations will not be subject to the 15% global minimum tax. This exclusion emerged from intricate negotiations between the Trump administration and other members of the G7. US Treasury Secretary Scott Bessent hailed this outcome as a "historic victory in preserving US sovereignty and protecting American workers and businesses from extraterritorial overreach," a sentiment that underscores the contentious nature of international tax agreements and national economic interests.

The current deal represents a moderated version of a landmark 2021 agreement, which initially sought to establish a universal minimum global corporate tax rate of 15%. The original intent of the 2021 framework was to prevent multinational corporations, such as Apple and Nike, from employing sophisticated accounting and legal strategies to funnel their earnings into low- or no-tax havens, typically found in jurisdictions like Bermuda and the Cayman Islands, where these companies maintain little to no actual business operations.

The 2021 deal, championed by former Treasury Secretary Janet Yellen, who made the corporate minimum tax one of her foremost priorities, faced considerable opposition. Donald Trump, for instance, criticized the Biden administration's negotiated agreement, arguing it was inapplicable within the United States and subsequently threatened retaliatory taxes against any countries that might impose levies on US firms under the terms of the 2021 deal. Congressional Republicans also widely condemned the initial plan, contending it would diminish the United States' competitiveness in the global economy.

In response to these domestic pressures and international complexities, the Trump administration re-negotiated the deal in June. This re-negotiation occurred after congressional Republicans successfully rolled back a "revenge tax" provision from Trump’s earlier tax and spending bill. That provision would have allowed the federal government to impose taxes on companies with foreign owners and on investors from countries deemed to be charging "unfair foreign taxes" on US companies.

This amended OECD plan has drawn sharp criticism from tax transparency groups. Zorka Milin, policy director at the Fact Coalition, a tax transparency nonprofit, voiced concerns that "This deal risks nearly a decade of global progress on corporate taxation only to allow the largest, most profitable American companies to keep parking profits in tax havens." These watchdogs consistently argue that a minimum tax is essential to halt an international "race to the bottom" in corporate taxation, a trend that has prompted multinational businesses to report their profits in nations offering the lowest tax rates.