After Thailand implements global minimum corporate tax, Trump pulls plug

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Thailand confirmed its adoption of the global minimum corporate tax rate of 15% on January 1, 2025, aligning with the Paris-based Organisation for Economic Cooperation and Development (OECD) global tax reform framework.

The new regulation is expected to impact multinational corporations operating in Thailand, particularly in the manufacturing and finance sectors.

Reuters reported that Thai-based multinational companies will see tax hikes, particularly in export-driven industries【8】.

Context & Background:

The OECD’s Base Erosion and Profit Shifting (BEPS) initiative aims to curb tax avoidance by setting a minimum corporate tax rate worldwide. Thailand’s finance ministry stated that the policy is necessary to ensure fair tax contributions from global firms.

Analysis & Implications:

While this move aligns Thailand with global tax standards, businesses worry it could reduce foreign direct investment (FDI). Some corporations may relocate operations to lower-tax jurisdiction.

Thailand’s decision to implement the global minimum tax rate was intended to mark a step towards greater transparency in corporate taxation, but policymakers must ensure that investment remains attractive.

US President Donald Trump has said the deal “has no force or effect” in the US, seemingly pulling the country out of the 2021 arrangement negotiated by the Biden administration with nearly 140 countries.

In a presidential memorandum issued hours after taking office, Trump also ordered the US Treasury to prepare options for “protective measures” against countries that have – or are likely to – put in place tax rules that affect US companies. 

The EU and the UK have also adopted the 15% global corporate minimum tax. However the US Congress never approved measures to bring the US into compliance. The US has a global minimum tax rate of around 10%, part of Trump’s landmark 2017 tax cut package approved by Republicans.

Countries that have adopted the 15% global minimum tax may be able to collect a “top-up” tax from US firms paying a lower rate, which Trump’s memo referred to as “retaliatory”. The memo added that “because of the Global Tax Deal and other discriminatory foreign tax practices, US companies may face retaliatory international tax regimes if the US does not comply with foreign tax policy objectives. This memorandum recaptures our Nation’s sovereignty and economic competitiveness by clarifying that the Global Tax Deal has no force or effect in the US,” it added.

After the OECD hosted years of negotiations on global tax issues to end a “race to the bottom” for corporate rates, former US Treasury Secretary Janet Yellen okayed the deal in October 2021.

However, Trump’s Treasury nominee Scott Bessent has now said following through with the global minimum tax deal would be a “grave mistake”.

Another part of the OECD talks aimed to share taxation rights on large multinational companies with countries where their products are sold, to curb unilateral digital services taxes that target largely American technology firms from Meta Platforms’ Facebook to Apple.

However, these discussions have largely stalled. Without US participation, countries may be tempted to reinstate their digital taxes, risking retaliatory tariffs from the US. 

SECOND VERSION

As of February 2025, Thailand, Malaysia, and Singapore have implemented a 15% global minimum corporate tax rate, aligning with the OECD’s framework to curb tax avoidance by multinational corporations. This policy shift aims to ensure that large companies contribute a fair share of taxes within these Southeast Asian economies. ([reuters.com](https://www.reuters.com/markets/asia/thailand-implement-global-minimum-corporate-tax-rate-jan-1-2024-12-27/?utm_source=chatgpt.com)) In contrast, the United States has withdrawn from the OECD’s global tax agreement. President Donald Trump issued an executive order declaring that the OECD’s global corporate tax agreement “has no force or effect” in the United States. This move has raised concerns about potential tax disputes, as other countries may impose additional taxes on U.S. multinationals operating within their jurisdictions. ([whitehouse.gov](https://www.whitehouse.gov/presidential-actions/2025/01/the-organization-for-economic-co-operation-and-development-oecd-global-tax-deal-global-tax-deal/?utm_source=chatgpt.com)) The divergence in tax policies between the U.S. and Southeast Asian nations introduces uncertainties for multinational corporations. Companies operating in Thailand, Malaysia, and Singapore must navigate the new tax landscape, balancing compliance with local regulations against potential implications of the U.S. withdrawal from the OECD framework. 

Thailand, Malaysia, and Singapore will implement the 15 percent global minimum corporate tax starting January 1, 2025, aligning with over 140 countries under the OECD framework. This marks a turning point for Southeast Asia’s business landscape, forcing multinational corporations to rethink their tax strategies in a region long defined by competitive rates and investment-friendly policies. While this move is meant to curb tax avoidance and level the playing field, it raises questions about whether these economies can maintain their edge in attracting global capital. Meanwhile, the United States is throwing a wrench into the deal, with President Donald Trump flatly rejecting the OECD framework and hinting at countermeasures against countries enforcing the new rules. The tax overhaul will be felt most acutely in Thailand, where export-driven industries such as automotive, electronics, and manufacturing face higher tax burdens. As a production hub for Japanese and Chinese firms, Thailand risks losing some of its appeal if tax hikes chip away at profit margins. Malaysia, looking to solidify its position as a rising player in semiconductors and renewable energy, must now reassess its tax incentives to keep foreign investors engaged. Singapore, the region’s corporate powerhouse, will rely on its sophisticated tax treaty network and business-friendly infrastructure to remain the first choice for multinational headquarters. But with these tax changes, the question is no longer just about who offers the lowest rate—it’s about who can offer the smartest incentives. For decades, Thailand, Malaysia, and Singapore have drawn investors with a mix of low taxes, skilled labor, and strategic access to Asian markets. Now, with Vietnam and Indonesia also adjusting their tax structures under OECD guidelines, companies will weigh their options carefully. To offset concerns, Thailand is rolling out sector-specific incentives, Malaysia is negotiating directly with foreign firms, and Singapore is fine-tuning its regulatory framework