OECD/G20 Inclusive Framework renews commitment to address tax challenges from digitalisation of the economy
The OECD/G20 Inclusive Framework on BEPS, has agreed during its 8-9 October 2020 meeting that the two-pillar approach they have been developing since 2019 provides a solid foundation for a future agreement.
During the meeting, a new Blueprint for Pillar One of the project was approved for public consultation. This would establish new “nexus” rules and a fundamentally new way of sharing taxing rights between countries, which aim to ensure that digitally-intensive or consumer-facing MNEs pay taxes where they conduct sustained and significant business, even when they do not have a physical presence, as is currently required under existing tax rules. A new Blueprint for Pillar Two of the project was also approved for public consultation. This would introduce a global minimum tax that would help countries around the world address remaining issues linked to base erosion and profit shifting by MNEs.