US Treasury Secretary Scott Bessent (Photo: REUTERS/Aaron Schwartz)

According to the OECD, the original framework consists of two “pillars,” with Pillar Two setting a global minimum corporate tax rate of 15% for large multinational corporations, regardless of where they operate.

Under the updated agreement, US-based multinationals will be exempt from additional foreign tax rules if they already comply with the US minimum tax system. The revision also introduces simplification measures and temporary safe-harbor mechanisms to ease the transition for businesses and reduce compliance costs.

US Treasury Secretary Scott Bessent said that this agreement represents a historic victory in preserving US sovereignty and protecting American workers and businesses from extraterritorial overreach, while recognizing the tax sovereignty of other countries. He pledged to continue engagement with other countries on a "constructive dialogue" on taxation of the digital economy, a reference to a more difficult pillar of the OECD tax framework.