US-OECD Tax Deal Weakens Expected Revenues for Mexico

The United States has reached a landmark "side-by-side" agreement with the Organization for Economic Cooperation and Development (OECD) and more than 145 countries to exempt US-headquartered multinational corporations from the 15% global minimum tax, commonly known as Pillar Two.

The agreement, announced on Jan. 5, 2026, by Treasury Secretary Scott Bessent, follows a first-year executive order by the Donald Trump administration that formally withdrew the United States from the OECD’s global tax framework. Under the deal, US companies will remain subject only to domestic global minimum tax rules, shielding them from extraterritorial "top-up" taxes that other jurisdictions had planned to impose on undertaxed profits.

The US Treasury Department said the agreement recognizes US fiscal sovereignty over the international operations of domestic firms and preserves the value of congressionally approved incentives, such as the research and development (R&D) tax credit, which would have been diluted under the OECD framework.

Bessent described the pact as a "historic victory" for American businesses. For Mexico and other OECD members, however, the decision removes a significant share of a projected US$200 billion global tax pool that the 15% minimum rate was expected to redistribute.

Implications for Mexico’s Fiscal Landscape

The exemption creates meaningful competitive challenges for Mexico. The global minimum tax was designed to establish a "level playing field" by limiting profit shifting to low-tax jurisdictions. Without US participation, Mexico loses an important mechanism to protect its tax base from erosion.

• Investment Concentration: In 2024, US entities led global investment outflows with US$360 billion. According to Mexico’s Secretariat of Economy, US firms accounted for US$16.146 billion (39.5%) of Foreign Direct Investment (FDI) in Mexico through September 2025.

• Tax Rate Disparities: The Trump administration’s plan to reduce the US corporate tax rate from 21% to 15% further widens the gap with Mexico's 30% rate, potentially incentivizing transnationals to consolidate operations in the United States. 

Nearshoring and Regional Stability

Despite these fiscal pressures, analysts argue that Mexico retains structural advantages. Oscar Ocampo, Director of Economic Development, Mexican Institute for Competitiveness (IMCO), said geography, competitive labor costs, and the predictability of the USMCA (T-MEC) remain decisive for investors.

"Mexico remains moderately competitive; beyond the fiscal aspect, it is a country with many advantages in terms of investment," Ocampo said. He cited access to low-cost natural gas and deep regional integration as key offsets to higher federal tax rates.

In its Economic Outlook 2025, the OECD  said the Mexican economy should see modest improvement supported by lower inflation, easing interest rates and steady employment, though significant headwinds persist. The organization revised its 2025 growth forecast down to 0.7%, reflecting moderated public spending and the dampening effect of trade uncertainty and potential tariffs on exports. These projections follow earlier OECD warnings about recession risks and ongoing fiscal consolidation efforts in Mexico.

However, the College of Public Accountants of Mexico (CCPM) cautioned that the US exemption could double the administrative burden for Mexican regulators. Authorities must now manage two parallel regimes: one governing US firms under potential USMCA renegotiations and another applying to OECD and G20 participants that continue to implement Pillar Two.