Rising tax complexity is the defining challenge facing businesses worldwide, but a series of international tax reforms currently taking shape could offer meaningful relief to Americans living and working overseas, even as the broader compliance environment grows more demanding.
The finding comes from Deloitte's 2026 Global Tax Policy Survey, published in July 2026, which polled 1,010 senior tax and finance leaders from organizations with $100 million or more in annual revenue across 28 jurisdictions between January and March of 2026.
The survey covers six major policy themes: transparency and reporting, digitalization of tax, taxing work and wealth, international tax reform, sustainability, and trade policy and tariffs; and reveals a global tax landscape where complexity is accelerating, but where pockets of genuine simplification are beginning to emerge.
The survey's chapter on taxing work and wealth (rated a top-three issue by 47 percent of respondents) zeroes in on a problem that has long frustrated internationally mobile professionals and their advisors: the risk of inadvertently triggering a permanent establishment in a foreign jurisdiction.
A permanent establishment is the legal threshold at which a worker's presence in a foreign country can create a taxable corporate footprint for their employer. For Americans on short-term international assignments or working remotely from abroad, crossing that threshold can generate unexpected and disproportionate tax obligations in jurisdictions where neither the individual nor their employer intended to create a taxable presence.
The survey found that approximately 39 percent of respondents expect recent updates to the OECD’s Model Tax Convention and Commentary to reduce the number of such inadvertent small permanent establishments arising from cross-border work.
The survey notes that these situations are particularly burdensome because small amounts of work, generating modest amounts of tax, can nonetheless create disproportionate compliance and administrative costs for businesses with staff working in other jurisdictions.
Looking forward, the survey found that 27 percent of respondents identified a Safe Harbour threshold as the most helpful future OECD reform and one that would allow workers to spend a defined number of days in a foreign jurisdiction, or engage in certain activity types, without triggering a permanent establishment. A further 22 percent called for clearer rules to prevent small or technical permanent establishments with limited profits from being created, and 19 percent supported an employer waiver program.
The survey's chapter on international tax reform identifies the negotiation of the so-called Side-by-Side package as the defining development of the past year in global tax policy. The package was designed to support the global rollout of the OECD's Pillar Two regime, the framework that establishes a global minimum corporate tax rate of 15 percent across participating jurisdictions.
As part of that agreement, four new Safe Harbours were introduced, according to the Deloitte report: the Simplified Effective Tax Rate Safe Harbour, the Substance-Based Tax Incentives Safe Harbour, the Ultimate Parent Entity Safe Harbour, and the Side-by-Side Safe Harbour itself. The existing Transitional Country-by-Country Reporting Safe Harbour was extended by one year.
The survey found that around 80 percent of respondents expected their organizations to be affected by the operation of these Safe Harbours — a figure the report describes as suggesting the benefits of the new regime are likely to be widespread. Some 58 percent of respondents said the new Safe Harbours would increase complexity in some areas of tax compliance but nonetheless viewed them as a helpful development.
Jeff Kummer, Managing Director at Washington National Tax at Deloitte US, cautioned in the report that while the Side-by-Side agreement provides some clarity, the changes are generally prospective as countries move to adopt them. This means, the report notes, that taxpayers may still be responsible for calculating tax reporting and filing requirements for earlier years — a near-term planning risk that advisors with affected clients should factor into their guidance.
The appetite for further simplification remains strong. The Deloitte survey found that 41 percent of respondents identified further Pillar Two simplification as their top priority for international coordination going forward.
According to the Deloitte report, 57 percent of respondents said their jurisdiction is increasing the value of special tax regimes and incentives designed to attract international workers, while only 20 percent said incentive values are decreasing.
This intensifying competition for mobile talent among jurisdictions creates new planning opportunities.
The survey also found that 57 percent of respondents believed existing incentives would remain valuable to their business because they are taken into account in Pillar Two calculations, while 38 percent expected new incentives to be introduced that would be of value to their business.
Despite these reform developments, the survey's headline finding is unambiguous: tax complexity is the dominant challenge facing businesses globally, and it is not abating. Transparency and reporting requirements ranked as the top business impact theme for the third consecutive year, cited by 65 percent of respondents in the Deloitte survey.
The single most significant operational factor, according to the report, was the increase in compliance, administrative, and reporting requirements — with sourcing and verifying data emerging as the top execution challenge across all policy themes.
Amanda Tickel, Deloitte's Global Tax and Trade Policy Leader, stated in the report that the central challenge going forward — running through each of the themes explored — is to check the balance between policy benefits and the costs and burdens of compliance.
Americans abroad already navigate some of the world's most demanding extraterritorial tax obligations, including requirements under the Foreign Account Tax Compliance Act (FATCA) and the Report of Foreign Bank and Financial Accounts (FBAR). The global escalation of reporting requirements documented in the Deloitte survey adds further complexity for clients with foreign assets or employment income.
The survey also flagged an emerging concern around the digitalization of tax administration. While 68 percent of respondents told Deloitte they expect artificial intelligence to produce faster and more efficient tax audit processes, 45 percent also said that AI-driven audit findings may become more difficult to understand and challenge, a consideration that could affect how US expat clients navigate foreign tax authority scrutiny in the years ahead.
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