Core Insights - The development of the digital economy is reshaping production and lifestyle, posing challenges to the existing tax system and necessitating a reevaluation of global tax governance in the context of digitalization [2][3]. Group 1: Current Landscape of Global Tax Governance - The global tax governance landscape is facing significant challenges due to geopolitical tensions and the impact of the digital economy, with the G20's "two-pillar" solution representing a collaborative effort to address these issues [3][4]. - The "two-pillar" framework aims to redistribute profits of multinational enterprises and establish a global minimum tax to curb tax avoidance, fundamentally altering traditional international tax rules [4][5]. Group 2: Negotiation Challenges - The negotiations surrounding the second phase of the BEPS initiative (BEPS 2.0) are encountering difficulties, with key issues stalling progress and some topics regressing [5][6]. - The U.S. government's opposition to certain aspects of the global minimum tax and its insistence on abolishing unilateral digital service taxes complicate the negotiation landscape [6][7]. Group 3: Implications for China - Over 55 countries are implementing or planning to implement the global minimum tax, with China actively participating in the BEPS process and contributing to the establishment of international tax principles [8][9]. - Chinese enterprises, especially those expanding internationally, need to enhance their awareness of global tax governance changes and prepare for compliance with evolving international tax rules [9].

Group 1 - The article discusses the adjustments made by the Trump administration to previous tax policies, particularly through the Global Intangible Low-Taxed Income (GILTI) rules, which effectively implement a minimum tax practice expected to continue in subsequent terms [1][4]. - China is currently an observer in the OECD process and has a long-term wait-and-see attitude towards the two-pillar framework, with its current corporate income tax rate at 25%, and certain sectors benefiting from a reduced rate of 15%, aligning with global minimum tax standards [2][5]. - The OECD's two-pillar framework was developed to address tax challenges arising from digitalization, with Pillar One focusing on reallocating taxing rights for large multinational enterprises and Pillar Two establishing a global minimum corporate tax rate to curb tax base erosion and profit shifting [3][4]. Group 2 - The implementation of Pillar Two has seen some Southeast Asian and European countries, as well as Hong Kong, advance its adoption, with Hong Kong introducing a minimum tax mechanism to meet global standards despite a standard tax rate of 16.5% [5]. - There is a growing global consensus on stabilizing corporate tax rates around 15% through domestic laws, regardless of the specific future direction of Pillar Two [5]. - Chinese companies expanding overseas are advised to understand the tax regulations of their investment destinations and utilize professional platforms to navigate tax issues, particularly in light of the "safe harbor rules" in places like Hong Kong [5].

Core Viewpoint - Trump's recent threats regarding digital taxes could destabilize the "Two-Pillar" framework, leading to increased uncertainty and potential backlash from affected countries [1][2]. Group 1: Digital Tax and U.S. Companies - Digital taxes are primarily aimed at U.S. tech giants like Apple, Amazon, Facebook (Meta), and Google, with bipartisan opposition in the U.S. against such taxes being viewed as discriminatory [2][3]. - Trump's strong stance against digital taxes includes potential tariffs and export restrictions, particularly targeting the EU's upcoming Digital Markets Act [2][3]. Group 2: International Taxation and the "Two-Pillar" Framework - The digital tax issue reflects a broader competition over taxation rights among nations, as traditional tax rules fail to address the profits of digital companies operating across borders [4][5]. - The G20 has tasked the OECD with designing the "Two-Pillar" framework to address these challenges, aiming to reshape international tax rules to prevent unilateral tax measures like digital service taxes [4][5]. Group 3: U.S. Government's Position - The Biden administration supports the "Two-Pillar" framework, emphasizing the importance of a global minimum tax rate of 15% to prevent tax competition [6][7]. - The U.S. has made commitments to the "Two-Pillar" framework, including a requirement for countries to abolish digital service taxes in exchange for benefits under Pillar One [7][8]. Group 4: Political Challenges and Reactions - The Biden administration faces domestic opposition, particularly from Republican lawmakers who argue that the U.S. has compromised too much on Pillar One and that the global minimum tax infringes on U.S. tax rights [8][9]. - Trump's withdrawal from international tax negotiations has led to a resurgence of interest in unilateral digital service taxes among other countries, as they may feel compelled to act independently if consensus is not reached [9][10]. Group 5: European Response - The EU has firmly rejected Trump's threats regarding digital service taxes, asserting its sovereign right to regulate U.S. companies within its jurisdiction [10][11]. - The EU's commitment to digital service taxes remains strong, with plans to enhance regulatory measures despite U.S. pressure [10][11].