G20 countries taking steps to implement 15% minimum corporate tax

All G7 countries, the European Union, a number of G20 countries and many other economies have now scheduled plans to introduce the global minimum tax rules.

According to the OECD Secretary-General Tax Report, members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) have concentrated on the practical implementation of the landmark agreement to reform international tax arrangements reached by over 135 countries and jurisdictions in October 2021.

The OECD report includes a new progress report on Pillar One, presenting a comprehensive draft of the technical model rules to implement a new taxing right that will allow market jurisdictions to tax profits from some of the largest multinational enterprises. This report will now be subject to public consultation through to mid-August.

The Inclusive Framework will then aim to finalise a new Multilateral Convention by mid-2023, for entry into force in 2024. This revised timeline, previously flagged by OECD secretary-general Mathias Cormann and agreed by the Inclusive Framework is designed to allow greater engagement with citizens, business and parliamentary bodies which will ultimately have to ratify the agreement.

“We have made good progress towards implementation of a new taxing right under Pillar One of our international tax agreement. These are complex and very technical negotiations in relation to some new concepts that fundamentally reform international tax arrangements, to make them fairer and work better in an increasingly digitalised, globalised world economy,” Cormann said. “We will keep working as quickly as possible to get this work finalised, but we will also take as much time as necessary to get the rules right. These rules will shape our international tax arrangements for decades to come. It is important to get them right,” he said.

In addition to the update on both Pillars, the report updates progress in the implementation of the Transparency Agenda. The most recent data gathered by the OECD-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes shows that information on at least 111 million financial accounts worldwide was exchanged automatically between administrations around the globe in 2021, covering total assets of nearly €11 trillion. Later this year, the OECD will finalise a new Crypto-Assets Reporting Framework and amendments to the OECD Common Reporting Standard to ensure that countries can continue to benefit from tax transparency standards.

The report has been delivered to G20 finance ministers and central bank governors ahead of their meeting in Indonesia later this week.

Fibre2Fashion News Desk (KD)