Harmonizing international tax laws: Legal Challenges of the oecd global minimum tax

Abstract

OECD's Global Minimum Tax, designed under Pillar Two of OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, aims to eradicate corporate tax evasion by imposing an essential minimum corporate tax rate, regardless of geographical location, in large multinational businesses. This project represents a real leap forward within international tax policies in terms of profit-shifting behaviour and fostering fairer levels of competition. Its implementation indeed poses important legal and regulatory issues, among which are tensions between national sovereignty and global tax harmonization, enforcement complexities, and the danger of unduly penalizing developing economies that rely on competitive tax rates. This paper examines these legal and regulatory implications: whether there is a need for legislative adaptation to balance international obligations with national fiscal autonomy, the impact on global economic inequality, and the compliance challenges posed by differences in regulatory capacities. The study concludes with policy recommendations suggesting standardized legal frameworks, enhanced international data sharing for enforcement, and special provisions that would ensure fair and effective implementation of laws across both developed and developing economies.