OECD releases key documents on two-pillar international tax reform

International tax reform to yield significant revenue: OECD

The OECD, today, released key documents as part of its two-pillar solution to reform international tax rules to address the tax challenges arising from globalization and digitalization.

Under Pillar One, the OECD has released a public consultation document on the Draft Multilateral Convention (MLC) Provisions on Digital Services Taxes (DSTs) and other Relevant Similar Measures.

The draft MLC provisions reflect the commitments with respect to the removal of all existing DSTs and other relevant similar measures and the standstill of future measures, which are an integral part of achieving Pillar One’s goal of stabilizing the international tax architecture. This follows the recent release of the consultation document on Amount B which completes the consultation on all the building blocks of Pillar One.

Comments must be received by January 20, 2023.

Under Pillar Two, the OECD has released an implementation package relating to Pillar Two Global Anti-Base Erosion (GloBE) Rules, which provide a coordinated system to ensure that multinational enterprises (MNEs) with revenues above EUR 750 million pay at least a minimum level – at an effective rate of 15 percent – on the income arising in each of the jurisdictions in which they operate.

The implementation package being released consists of the following elements: Guidance on Safe Harbors and Penalty Relief; a public consultation document on the GloBE Information Return; and a public consultation document on Tax Certainty for the GloBE Rules.

Comments on these documents must be received by February 3, 2023.

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