On 30 June 2026, exactly a week from now, multinational groups across more than three dozen jurisdictions will lodge their first GloBE Information Return. It is the most ambitious cross-border tax filing the world has ever attempted. India is not in the queue.
That is not a footnote. It is the single most important fact about Indian international tax this year, and almost nobody is talking about it.
The week the global minimum tax goes live
The OECD's Pillar Two is now operational. The rules apply to multinational groups with consolidated revenues of at least €750 million. If their effective tax rate in any jurisdiction falls below 15%, someone, somewhere, collects a top-up. Roughly 140 jurisdictions joined the inclusive framework back in 2021. Thirty-seven have actually legislated a Qualified Income Inclusion Rule or a Qualified Domestic Minimum Top-up Tax that bites from the 2024 reporting fiscal year.
The OECD was still soldering plumbing in the last weeks before the deadline. On 18 May 2026 it issued a common understanding allowing groups to file centrally in one jurisdiction and avoid duplicate local returns, provided each domestic office gets a notification. That a structural feature of the regime had to be settled eight weeks before the first deadline tells you something about how unfinished this compact still is.
Three countries that stayed away
The United States, China and India have not implemented Pillar Two. The American position is now formal: in January 2026 the US Treasury announced that US-headquartered groups would be exempt, and the OECD's 5 January Side-by-Side package legalised that exit by carving out a safe harbour for groups parented in jurisdictions with ‘eligible’ tax regimes. The US is, as of today, the only jurisdiction on the OECD Central Record with a confirmed Eligible SbS Regime.
India's stance has been quieter, and to my mind more considered. We participated in the framework. We never legislated the rules. We watched.
Why I think the wait was right
Pillar Two is not really a tax. It is a coordination mechanism that exports one country's view of what another country's tax base should be. It is the first time in modern fiscal history that a domestic legislature has been asked to outsource the residual taxing right on profits earned at home to a residence jurisdiction abroad. That deserves more scepticism than it gets in polite international tax conversation.
For India, the cost-benefit was always thin. The corporate rate here is 22%, or 25.17% with surcharge and cess. The concessional rate for new manufacturers is 15% statutory, around 17.16% effective. We are not a low-tax jurisdiction. Pillar Two only matters when you are below the floor; we mostly are not.
The price of joining would have been real. A QDMTT regime to design. A GloBE return architecture to build. A workforce to retrain in jurisdictional ETR computation. Disputes to defend under accounting standards that are not ours. And acceptance that the rules will be rewritten by an OECD working party in which our vote is one among many. None of that grows the base. It expensively confirms what we already collect.
What we still need to claim
The harder side is data. The 2024 GIR is the first time multinational groups will publish, in a standardised XML schema, a jurisdiction-by-jurisdiction picture of where their profits arose and what tax those profits paid. Other administrations will receive that file automatically. India, outside the exchange relationships, will not, unless we sign on to receive it. That is a transparency dividend we should be claiming whether or not we ever impose a single rupee of top-up tax.
Soft power is the other piece. The Side-by-Side carve-out is, in effect, a US-only privilege today. The OECD has signalled other jurisdictions may be added. ‘May’ is doing the heavy lifting in that sentence. If a future investor's post-tax compliance burden is lighter under a US parent than under an Indian one, we have not lost any revenue, but we have lost a piece of the architecture of who matters in the next decade of international tax rule-writing.
A proposal
The smart move is not to copy Pillar Two. It is to ask for the data, build the analytical capacity, and use the next eighteen months to find out where Indian profit shifting is genuinely costing us revenue. Three concrete steps.
- Sign the GIR Multilateral Competent Authority Agreement. The cost is administrative. The value is a structured view of every in-scope group's worldwide tax footprint, delivered automatically.
- Commission a quiet domestic study of jurisdictional ETRs for India-headquartered MNEs. Two or three years of clean data will tell us whether a future QDMTT would collect ten thousand crore or ten lakh. Right now the number is asserted, not measured.
- Use the Income-Tax Act 2025 transition window to bake in a minimum-tax-compatible computational backbone. If we later choose to switch on a QDMTT, the systems already speak the schema. Building it after a political decision is far more painful than building it now, while the law is still warm.
Pillar Two will either be remembered as the most consequential multilateral tax instrument since the League of Nations drafted the first model treaties in the 1920s, or as a noble experiment that fractured the moment its largest economy walked away. We do not need to guess which today. We need to stay liquid: positioned to step in, positioned to step out, owning the data either way. That is the case for sitting out 30 June with intent.
#PillarTwo #GlobalMinimumTax #IncomeTax #IndianEconomy #TaxPolicy #OECD #InternationalTax
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