Global Cooperation

What does the OECD global minimum tax mean for global cooperation?

Person calculating finances.

New incentives put in place to prevent tax havens. Image: Kelly Sikkema/Unsplash

Simon Torkington
Senior Writer, Forum Agenda
Our Impact
What's the World Economic Forum doing to accelerate action on Global Cooperation?
The Big Picture
Explore and monitor how Economic Progress is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Global Cooperation

  • More than 140 countries have signed up to the Global Minimum Tax deal.
  • The tax treaty imposes a minimum rate of 15% on the profits of multinationals.
  • The Global Cooperation Barometer launched at Davos calls for more collaboration.

More than 140 countries have committed to implement a new global tax agreement aimed at ensuring multinational companies pay a minimum rate of tax.

The deal, which was proposed by the Organisation for Economic Co-operation and Development (OECD), imposes a minimum effective rate of 15% on corporate profits. The policy is aimed at ending the benefit of shielding multi-billion-dollar profits in tax havens. It is also intended to remove the incentive for nations that operate as tax havens for corporate giants.

The OECD estimates the Global Minimum Tax (GMT) policy will reduce under-taxed profits by around 80%, as it applies across geographies, national income boundaries and tax haven structures.

Share of low-taxed profit as a percentage of total profit, by jurisdiction group
The global minimum tax agreement will reduce low-taxed profit by around 80%. Image: OECD

Closing tax loopholes

The GMT seeks to end the practice of multinational companies shifting profits to low-tax countries and territories, even though the income was generated elsewhere. The Financial Times explains that, under the GMT agreement, if a country levies a tax rate below 15% other countries will be able to impose a top-up tax that brings the total up to the minimum level.

Countries that have previously operated as tax havens, including Ireland, Luxembourg, Switzerland and Barbados, are implementing the minimum rates, according to the Financial Times.

Have you read?

Companies with earnings above €750 million ($812 million) are subject to the new 15% rate and the OECD estimates profit shifting will fall by half in the coming years.

The first step towards a fair and just tax system

The potential impact of the GMT was the focus of a discussion at the 2024 Annual Meeting of the World Economic Forum in Davos, Switzerland.

Speaking in a session entitled, ‘Tax in Motion’, Lucas Chancel, Associate Professor at the Institute of Political Studies in Paris, said the GMT was a good first step but would do little in addressing the overall injustice of national and global tax structures.

“We're very far from having solved the problem of tax justice in this world. For one thing, the 15% minimum tax is still much lower than what small and medium businesses pay in most countries in this world … so we really need to fix these loopholes at the top of the tax system,” Chancel told the panel in Davos.


What's the World Economic Forum doing about tax?

Global cooperation in a fragmenting world

The GMT tax agreement is a positive sign of global cooperation at a time when relations between powerful countries and global regions are becoming ever more strained.

Launched at Davos 2024 by McKinsey & Company and the World Economic Forum, the Global Cooperation Barometer shines a light on the current state of international cooperation. The report finds that at a time when multiple global challenges require urgent cooperation, the broad trend is for inward-looking entrenchment, polarization and fragmentation.

But as the GMT deal demonstrates, global cooperation can coexist alongside competition. Indeed, there are multiple examples of newly forged trade deals that provide a sense of optimism against a backdrop of polarization.

Trade is the number one driver of global cooperation identified in the report, which looks at five pillars to provide a snapshot of the current state of international cooperation.

Cooperation trends by pillar
Trade is the leading driver of global cooperation at a time of increased tension. Image: WEF

The year ahead is likely to offer challenges and opportunities for global cooperation. In 2024, more than 60 countries will hold elections, including major economies such as the US, the UK and India. The outcomes of these elections will likely have impacts beyond their borders and shape international relations for years to come.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Global CooperationEconomic Growth
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Children are at climate change's sharp edge — we must do more to protect them

Blair Palmer

June 21, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum