Nearly 150 countries have signed off on a reworked global tax agreement aimed at curbing profit shifting by multinational corporations, but a major exemption for the United States has sparked backlash from tax transparency advocates, who warn the deal risks undermining years of progress toward fairer corporate taxation.
The agreement, finalised this week under the auspices of the Organisation for Economic Cooperation and Development (OECD), preserves the framework of a global minimum corporate tax while carving out special treatment for large US-based multinationals. The exemption follows months of negotiations between the Trump administration and other members of the Group of Seven (G7), significantly diluting a landmark 2021 accord.
OECD Secretary-General Mathias Cormann hailed the outcome as a breakthrough in multilateral cooperation, calling it a “landmark decision in international tax cooperation” that would enhance certainty for businesses, reduce administrative complexity, and protect national tax bases. He said the revised framework strikes a balance between preventing aggressive tax avoidance and respecting national tax systems.
US officials framed the deal as a strategic win. Treasury Secretary Scott Bessent described it as “a historic victory in preserving US sovereignty and protecting American workers and businesses from extraterritorial overreach,” arguing that earlier proposals unfairly targeted US firms and exposed them to foreign taxation.
At the heart of the controversy is the weakening of the 2021 OECD agreement, which introduced a 15% global minimum corporate tax. That deal was designed to prevent multinational corporations — including technology and consumer giants such as Apple and Nike — from using complex accounting structures to shift profits to low- or no-tax jurisdictions where they conduct little real economic activity.
Such tax havens often include places like Bermuda and the Cayman Islands, which offer minimal corporate tax rates and have long attracted profits booked offshore. Supporters of the minimum tax argued it would halt a decades-long race to the bottom, in which countries competed for investment by lowering corporate tax rates, eroding public revenues worldwide.
Donald Trump, however, was an outspoken critic of the 2021 deal negotiated by the Biden administration, insisting it was not applicable to the United States. Upon returning to office, his administration warned it would impose retaliatory taxes on countries that sought to levy minimum-tax top-ups on US companies under the OECD framework.
The original agreement had been championed by former treasury secretary Janet Yellen, who made global tax reform a cornerstone of US economic diplomacy. While widely praised by international partners, the plan faced fierce opposition from congressional Republicans, who argued it would put US firms at a competitive disadvantage and surrender taxing authority to foreign governments.
Tensions escalated earlier this year when congressional Republicans rolled back a so-called “revenge tax” provision included in Trump’s sweeping tax and spending legislation. That provision would have allowed Washington to impose taxes on foreign-owned companies and investors from countries deemed to be applying “unfair foreign taxes” on US businesses. Its removal cleared the way for renegotiation with the OECD.
Despite broad international backing, the revised deal has drawn sharp criticism from tax justice and transparency groups, who say exempting the world’s largest economy fatally weakens the framework.
“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,” said Zorka Milin, policy director at the Fact Coalition, a US-based tax transparency nonprofit.
Tax watchdogs warn that without full US participation, the minimum tax may fail to stop multinationals from continuing to book profits in low-tax jurisdictions, depriving governments of revenue needed for public services and infrastructure. They argue the compromise could embolden other countries to seek carve-outs, threatening the long-term credibility of global tax coordination.
While the OECD insists the agreement represents a pragmatic step forward, critics fear it marks a retreat from the original ambition of creating a truly level playing field for multinational taxation.
