OECD Study Provides First Real-World Evidence on Pillar Two’s Impact
For several years, discussions surrounding the OECD’s 15% Global Minimum Tax (Pillar Two) have largely been based on forecasts, economic modelling and expectations. The publication of the OECD report, MNE Responses to the Global Minimum Tax, provides one of the first empirical assessments of how multinational enterprises have responded since the rules entered into effect in 2024.
The report examines the initial behavioural and fiscal effects of Pillar Two by comparing multinational enterprise groups that fall within the regime with similar groups that remain outside its scope.
Higher Effective Tax Rates for In-Scope Multinationals
The OECD finds that multinational enterprise groups subject to Pillar Two reported higher effective tax rates following implementation of the Global Minimum Tax.
To assess the impact, the study compares companies located just above and just below the €750 million consolidated revenue threshold, which determines whether a multinational group falls within the scope of the rules.
This approach provides one of the strongest empirical analyses available to date of the early effects of the Global Minimum Tax.
Additional Corporate Tax Revenues Estimated at €79–109 Billion
One of the report’s most significant findings is its estimate that Pillar Two generated between €79 billion and €109 billion in additional corporate income tax revenues during its first year of implementation.
The findings suggest that the minimum tax has begun delivering additional tax revenues while increasing reported effective tax rates among affected multinational groups.
Limited Short-Term Impact on Investment and Employment
The OECD also examined whether Pillar Two has affected broader business activity.
According to the report, there is little evidence that the Global Minimum Tax has reduced investment or employment among multinational groups covered by the regime during its first year of operation.
While the analysis focuses on short-term outcomes, the OECD notes that longer-term behavioural responses may emerge over time and therefore fall outside the scope of the current study.
First-Year Results Only
The OECD emphasises that the analysis reflects only the first year of implementation following the introduction of Pillar Two in 2024.
As a result, the report does not assess longer-term behavioural changes, subsequent legislative developments, or policy changes introduced after the study period.
A New Phase in Evaluating Pillar Two
The report represents an important milestone in the implementation of the OECD/G20 Inclusive Framework on BEPS.
Rather than relying solely on forecasts, policymakers and tax professionals now have access to the first empirical evidence on how multinational enterprises have responded to the Global Minimum Tax.
Although additional years of data will be needed to assess the regime’s long-term economic effects, the OECD’s findings indicate that Pillar Two has increased effective tax rates and generated additional corporate tax revenues while showing limited short-term impacts on investment and employment.
Source: OECD, MNE Responses to the Global Minimum Tax.