The 2026 outlook for global tax policy and controversy

The pace of global change is relentless, and decisions rarely occur in isolation. Around the world, leaders are navigating a complex web of competing priorities: stimulating growth while protecting public finances, balancing security needs against budget constraints, working with international partners without sacrificing national interests and embracing technological innovation amid rising risks. These pressures all surface in global tax negotiations, which increasingly mirror the interconnected and demanding realities of modern policymaking.

The three major drivers of tax policy

There are three major drivers that together are shaping tax policy and controversy in 2026. We’ll explore each and how business can prepare for potential changes.

1. Balancing tax competition and revenue needs

Governments face a delicate balancing act. On one hand, they must generate more revenue to fund security measures, sustain public programs and manage mounting debt. On the other, they strive to remain attractive destinations for investment and catalysts for economic growth. We’ll explore how governments are navigating these competing priorities amid political and economic volatility. We’ll also explain how businesses can capitalize on opportunities and reduce risks.

2. International tax cooperation

Global tax cooperation can be achieved in a variety of ways, and is not defined by any one consensus-driven process. The Organisation for Economic Co-operation and Development (OECD) continues to play a central role, particularly in supporting the implementation of the Base Erosion and Profit Shifting (BEPS) 2.0 Pillar Two global minimum tax. Momentum is also building across other forums, including the United Nations’ Framework Convention on International Tax Cooperation, as well as through regional initiatives, bilateral agreements and unilateral measures that are advancing in parallel. This evolving landscape reflects a broader shift in which tax policy is increasingly shaped by geopolitical priorities and closely linked to trade, industrial strategy and supply chain considerations. See below for our latest thinking on the fragmented nature of global tax cooperation today and how it is impacting areas of prior agreement.

3. Rising tax controversy

Despite ongoing efforts to harmonize global tax norms, compliance remains fragmented and continues to evolve at a rapid pace. The heightened level of tax risk and controversy will continue as sources of tax controversy diversify. The implementation of the Global Minimum Tax of Pillar Two, including the side-by-side arrangement, the future of digital taxes and changing transfer pricing policies are all poised to add to current workloads. Effective data management is critical to addressing this rising controversy. Both businesses and tax authorities are embracing technology, including generative AI (GenAI), in the hopes of alleviating burdens. We’ll explore what governments and tax authorities are doing and how businesses can prepare and manage the risks.