Executive summary

On 17-18 July 2025, the G20 Finance Ministers and Central Bank Governors met in Durban, South Africa. The communiqué released at the conclusion of the meeting includes a brief section on international tax matters.

The communiqué references efforts being advanced in the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework to address concerns about the Pillar Two global minimum tax, with the shared goal of finding a balanced and practical solution that is acceptable to all. It also notes the ongoing negotiations on a United Nations (UN) Framework Convention on International Tax Cooperation.

In advance of the meeting, the OECD released its customary Secretary-General Tax Report to the G20 Finance Ministers. The Report outlines ongoing work on tax matters, providing updates on Pillars One and Two, implementation of the Base Erosion and Profit Shifting (BEPS) minimum standards and other tax work. The OECD also released, as Annex A to the Report, a detailed report regarding progress on tax transparency since the inception of the G20.

Detailed discussion

G20 communiqué

The international tax section of the July 2025 G20 Finance Ministers and Central Bank Governors communiqué first addresses ongoing activity with respect to Pillar Two, stating:

We will continue engaging constructively to address concerns regarding Pillar Two global minimum taxes, with the shared goal of finding a balanced and practical solution that is acceptable for all. Delivery of a solution will need to include a commitment to ensure any substantial risks that may be identified with respect to the level playing field, including a discussion of the fair treatment of substance-based tax incentives, and risks of base erosion and profit shifting, are addressed and will facilitate further progress to stabilise the international tax system, including a constructive dialogue on the tax challenges arising from the digitalisation of the economy. These efforts will be advanced in close cooperation across the membership of the OECD/G20 Inclusive Framework (IF), preserving the tax sovereignty of all countries.

The communiqué also references other international tax work, noting that the G20 Finance Ministers are looking forward to: (1) a report from the OECD and Global Forum on Transparency and Exchange of Information for Tax Purposes covering progress on tax transparency (which was delivered as Annex A to the OECD Secretary-General Report); (2) an Inclusive Framework report on BEPS; (3) an OECD report on exchange of real estate information; (4) a report from the Platform for Collaboration on Tax (PCT) on strengthening capacity-building frameworks to enhance technical assistance; and (5) an International Monetary Fund report on strengthening revenue administrations to improve domestic revenue mobilization. The communiqué also welcomes the PCT's announcement of a tax and development conference on domestic revenue mobilization to be held in Tokyo in 2026.

The communiqué welcomes the Inclusive Framework's planned phased approach for exploring global mobility and understanding the interaction between tax policy, inequality and wealth. It also welcomes discussions to enhance the effectiveness and inclusivity of the Inclusive Framework.

In addition, the communiqué references the ongoing negotiations to establish a UN Framework Convention on International Tax Cooperation. In this regard, the communiqué states that "the participating G20 members reaffirm the objectives to reach broad consensus and build on existing achievements, processes, and on the ongoing work of other international organisations, while seeking to avoid unnecessary duplication of efforts."

OECD Secretary-General Report

The OECD Secretary-General Tax Report provides an overview of recent developments in international tax cooperation and the OECD's support for the G20's tax agenda, including ongoing activity on Pillars One and Two, the implementation of BEPS minimum standards and other tax projects.

Support for G20 initiatives

The Report includes an update on the OECD's progress on requests from the G20. Following encouragement by successive G20 presidencies, the Inclusive Framework has agreed to consider the interaction of tax policy, inequality and growth, with the intention to look at data and economic analysis and facilitate the sharing of experiences with respect to domestic policy tools to inform future discussions in this area.

The Report indicates that, at the request of the South African G20 presidency, the Inclusive Framework at its April 2025 meeting agreed on the importance of evaluating the progress to date on BEPS using an evidence-based approach that shows the economic impact of the BEPS Actions. A report on this topic will be delivered to the G20 Finance Ministers for their October 2025 meeting. (For background, see EY Global Tax Alert, OECD/G20 Inclusive Framework issues statement following plenary meeting, dated 14 April 2025.)

A report on progress on tax transparency requested by the South African G20 presidency is included as an Annex to the Report.

The Report also notes that the OECD is working on identifying simplifications and ways to foster tax certainty and reduce costs for both taxpayers and tax administrations. This work includes a focus on identifying ways to simplify international tax rules to make implementation easier, especially for developing countries. A report on this work will be shared before the October G20 Finance Ministers meeting.

The Report further indicates that the OECD is preparing a report on potential scoping for an international framework to enhance the automatic exchange of readily available information regarding real estate. This includes assessing the feasibility of providing tax administrations with cross-border access to information in ownership registers. A report on this topic also will be shared before the October meeting.

Pillars One and Two

On Pillar One Amount A, the Report indicates that Inclusive Framework member jurisdictions at the April plenary meeting agreed to continue discussions aimed at securing further certainty and stability in the international tax system. It also notes that Inclusive Framework members continue to take steps toward implementation of Pillar One Amount B.

On Pillar Two, the Report states that more than 55 jurisdictions have implemented, or are planning to implement, the Global Anti-Base Erosion (GloBE) Rules or a Qualified Domestic Minimum Top-up Tax effective from January 2024 or 2025; it also indicates that more than 10 jurisdictions have taken concrete steps toward implementation.

The Report briefly references the concerns raised by the United States (US) during the April Inclusive Framework meeting regarding the application of Pillar Two rules to US multinational enterprises (MNEs) and the understanding reached in the G7 in June on a "side-by-side" arrangement to address these concerns (see EY Global Tax Alert, G7 issues statement on global minimum taxes, dated 9 July 2025), noting the intention to work through the Inclusive Framework to reach a solution that is acceptable to all.

In addition, the Report indicates that, in response to stakeholder feedback, the Inclusive Framework is working to simplify compliance with the global minimum tax for MNE Groups operating in jurisdictions with a high effective tax rate through development of a safe harbor based on a simplified effective tax rate calculation. The Report also notes that the Consolidated Commentary to the GloBE Model Rules has been updated to include Agreed Administrative Guidance released by the Inclusive Framework up until March 2025 and that the Multilateral Competent Authority Agreement on the Exchange of GloBE Information has been opened for signature.

On the Subject to Tax Rule (STTR) element of Pillar Two, the Report indicates that more than 70 developing countries are eligible to request the inclusion of the STTR in their bilateral agreements with other Inclusive Framework member jurisdictions.

BEPS minimum standards

The Report provides an update on progress across all four BEPS minimum standards. On Action 5 on harmful tax practices, there have been more than 58,000 exchanges of tax rulings as of December 2024, and 332 regimes have been reviewed with almost all regimes either now abolished, in the process of being abolished or aligned with the standard. On Action 6 on tax treaty abuse, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS now covers 105 jurisdictions, with more than 90% of tax treaties between Inclusive Framework members now compliant or in the process of being made compliant. On Action 13 on Country-by-Country (CbC) reporting, more than 120 Inclusive Framework members have introduced legislation requiring CbC reporting, which covers substantially all MNEs exceeding the €750m threshold, and more than 4,600 bilateral exchange relationships for CbC information are now in place. On Action 14 on dispute resolution in tax treaties, 82 jurisdictions have undergone two stages of peer reviews of their Mutual Agreement Procedure programs.

The Report further indicates that the Inclusive Framework has agreed to revisions to existing practices, which are aimed at reducing the burden and simplifying peer review processes for three of the BEPS minimum standards. Peer reviews for Action 5 will now begin with a BEPS impact assessment and will proceed to the legislative review step only if BEPS risks are identified; also, monitoring frequency will be reduced from annually to once every three years. The frequency of peer reviews for Action 6 will be reduced to once every five years. For Action 13, the Inclusive Framework has determined that developing country members should be able to set their own timelines for gaining access to CbC reports, with tailored implementation support prioritized for jurisdictions seeking access within two years to four years commencing September 2025. The OECD also is exploring the development of information technology tools to reduce the cost of accessing CbC reports for developing countries. Regarding Action 14, given the updates to the peer review methodology agreed in 2023 (see EY Global Tax Alert, OECD releases revised methodology for BEPS Action 14 peer reviews and updates on reporting of MAP and APA statistics, dated 17 February 2023), the Inclusive Framework confirmed at its plenary meeting in April 2025 that no further changes are required at this time.

Other tax work

The Report states that the Inclusive Framework is expanding its analytical scope with two new workstreams: one focusing on the interaction of tax policy, inequality and growth, and the other addressing the changing nature of work to ensure tax rules do not hinder opportunities for global mobility and to assess possible tax-base risks.

The Report includes a brief review of the OECD's tax policy and statistics work, highlighting recent revenue statistics publications and working papers presenting economic analyses of various tax policy matters.

The Report also provides an update on the OECD's ongoing work on tax and development, including recent events organized by Tax Inspectors Without Borders and the Platform for Collaboration on Tax. The Report also briefly summarizes the results of a recent independent evaluation of the OECD's tax and development program, indicating that more than 75% of surveyed stakeholders responded that the program improves skills and strengthens processes in tax administrations.

Progress on tax transparency

"Taking Stock of Progress on Transparency and Exchange of Information for Tax Purposes," the report prepared at the request of the South African G20 Presidency, describes the progress made in global tax transparency and exchange of information since the G20's inception. According to the progress report, the tax transparency landscape has transitioned from a fragmented, bilateral approach to a robust multilateral framework for combatting financial secrecy and tax evasion. Achievements include the near-universal adoption of the exchange-of-information-on-request standard, the successful implementation of the Common Reporting System for automatic exchange of financial account information, and the development of new standards for reporting on crypto-assets and digital platform sales. The progress report indicates that these efforts have not only yielded substantial additional revenues for governments but also demonstrably increased tax compliance, citing as evidence a significant decline in offshore bank deposits.

The progress report further indicates that challenges remain, particularly regarding beneficial ownership information, data quality, and the expansion of transparency to nonfinancial assets like real estate. The G20 has recognized the need for ongoing vigilance and innovation to address these emerging risks. As part of this commitment, the OECD is exploring ways to enhance transparency in real estate holdings. The progress report further notes that continued capacity-building efforts and monitoring mechanisms are essential to ensure that jurisdictions, especially developing countries, can effectively implement these standards and benefit from increased transparency.

Implications

The tax section of the G20 communiqué reflects the evolving tax priorities of the G20. The Secretary-General Report provides an update on the OECD's ongoing work on various tax initiatives, including Pillars One and Two, implementation of the BEPS minimum standards and tax transparency.

Businesses should monitor tax discussions in the G20 and the ongoing tax work of the OECD and other international organizations. Staying informed about tax proposals and tax legislative developments in relevant jurisdictions will help businesses navigate the complexities of the global tax landscape effectively.