OECD Inclusive Framework on BEPS adopts programme for resolving tax challenges of digitalisation
Released 31 May 2019
The Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has adopted a work programme for resolving the tax challenges from digitalisation of the economy.
The 129 members of the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework on BEPS have agreed a programme of work laying out a process for reaching a new global agreement for taxing multinational enterprises. The programme of work will explore the technical issues to be resolved through two main pillars. The first pillar will explore potential solutions for determining where tax should be paid and on what basis ("nexus"), as well as what portion of profits could or should be taxed in the jurisdictions where clients or users are located ("profit allocation"). The second pillar will explore the design of a system to ensure that multinational enterprises – in the digital economy and beyond – pay a minimum level of tax. This pillar would provide countries with a new tool to protect their tax base from profit shifting to low/no-tax jurisdictions and is intended to address remaining issues identified by the OECD/G20 BEPS initiative.