Released 01 July 2021
The OECD has confirmed that 130 of the Inclusive Framework’s 139 countries and jurisdictions have joined a new two-pillar plan, and agree to accept a global minimum corporation tax rate of 15%.
The two-pillar package aims to ensure that large Multinational Enterprises (MNEs) pay tax where they operate and earn profits, while adding much-needed certainty and stability to the international tax system.
Pillar One will ensure a fairer distribution of profits and taxing rights among countries with respect to the largest MNEs, including digital companies. It would re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there.
Pillar Two seeks to put a floor on competition over corporate income tax, through the introduction of a global minimum corporate tax rate that countries can use to protect their tax bases.
Further details can be found in the OECD press release (1 July 2021): 130 countries and jurisdictions join bold new framework for international tax reform.