G20 Finance Ministers Meeting and OECD Update on Pillar 2 Developments

On October 15 and 16, 2025, the fourth meeting of the G20 Finance Ministers and Central Bank Governors took place in Washington D.C. Regarding the future of Pillar 2, the G20 expressed their commitment to continued constructive cooperation. Concerns regarding Pillar 2 should be addressed as quickly as possible with a balanced, practical, and consensual solution, according to the summary by the South African G20 Presidency of the meeting. Without explicitly naming it, this likely refers to discussions about the U.S. demand for a carve-out for U.S. corporations.

The United States, which has not implemented Pillar 2, had prepared significant countermeasures in the first half of the year as part of its recent tax reform (the "One Big Beautiful Bill Act"), which would be directly aimed at companies from countries where U.S. companies or their foreign subsidiaries would be subject to minimum taxation. In the summer of this year, the G7 then announced an initial agreement (“shared understanding“) regarding the principles of a "side-by-side" approach, which would include an exemption for U.S. companies.

However, details of a concrete agreement in this debate remain unclear even after the most recent meeting in Washington. At the G20 level, there appears to be consensus that all relevant competitive concerns must be considered in finding a solution. Furthermore, it is hoped that an agreement on Pillar 2 will facilitate further progress in negotiations on the international tax system – particularly in connection with the tax challenges arising from the digitalization of the economy, which likely refers to the stalled negotiations on Pillar 1.

OECD Status Report in Preparation for the G20 Finance Ministers Meeting

In preparation of the G20 Finance Ministers meeting, OECD Secretary-General Mathias Cormann provided an update on current developments in the area of global minimum taxation.

"Side-by-Side"-Debate solved by Year-End?

Regarding the U.S. demand for a US-exemption from Pillar 2 ("side-by-side"), the OECD update indicates that an internationally accepted solution is intended by year-end. Given the diverging interests of countries that have implemented Pillar 2 and those that do not plan to do so, this timeline appears very ambitious. Accordingly, reactions from G20 member states to this timeline assessment at the G20 meeting were reportedly cautious.

The Reduction of Compliance Burden for High-Tax Countries Through Additional Safe Harbour by Year-End

The OECD plans to finalize a new safe harbour by year-end, which would enable companies to demonstrate a sufficiently high effective tax rate on a country-by-country basis using a new, simplified calculation. The extent to which the new regulations will lead to significant simplifications and reduce the compliance burden for high-tax countries to an adequate level after the expiration of the CbCR safe harbours remains to be seen.

Exchange Among Tax Administrations in the Context of the "Amsterdam Dialogue"

Furthermore, the OECD Secretary-General provided an update on the so-called "Amsterdam Dialogue." The "Amsterdam Dialogue," initiated in November 2024 and now apparently taking place regularly, provides tax administrations with a forum for exchanging views on Pillar 2 issues. The format is intended to promote the exchange of experiences between tax administrations and include common approaches to more efficient administration of the Pillar 2-taxes.

As a first result, a country-specific overview of additional reporting requirements beyond the standard minimum tax return (“GloBE Information Return“, “GIR“) was published on the OECD website in August 2025.

Current Status on Centralized Filing of the Minimum Tax Return

With the Multilateral Competent Authority Agreement on the Exchange of GloBE Information (“MCAA“), the OECD published a model international agreement for the automatic exchange of GIR between tax authorities (see also the blog post of February 3, 2025 (in German)) in January 2025. This is intended to significantly reduce administrative burden, as the GIR can be filed centrally, as intended in the OECD Model Rules. In addition, a standardized file format (the so-called "XML Schema") with corresponding user manuals was published.

According to the OECD update, 21 countries have signed the OECD MCAA since January 2025, including Germany and 12 other EU member states (as of October 8, 2025). For comparison: according to the latest OECD report, 42 countries have so far introduced a qualified Income Inclusion Rule (IIR), and 43 countries have introduced a qualified Domestic Minimum Top-up Tax (QDMTT).

In parallel, the EU has also advanced the automatic exchange of GIR. Through the so-called DAC 9 Directive (EU Directive 2025/872), member states are required to create national legislation for the EU-wide automatic exchange of GIR by the end of 2025 (see this blog post in German).

This article is also available in German.