KPMG report: OECD/G20 Inclusive Framework agreement on BEPS 2.0
Initial analysis of October 2021 statement approved by the OECD/G20 Inclusive Framework
Initial analysis of October 2021 statement approved by the OECD/G20 Inclusive Framework
One hundred and thirty six (136) member jurisdictions of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS)—representing more than 90% of global GDP—yesterday approved an eight-page statement finalizing several key aspects of a framework for reforming the international tax system.
Yesterday’s statement updates a previous statement from 1 July 2021 and finalizing several previously unsettled quantitative parameters of the two-pillar approach.
- Pillar One of the agreement would formulaically reallocate more than U.S. $125 billion of profits from (initially) around 100 of the world’s largest and most profitable multinational enterprises (MNEs) to “market jurisdictions” without regard to the arm’s length principle and the traditional permanent establishment standard.
- Pillar Two secures an unprecedented agreement on a global minimum tax regime, imposing multilaterally agreed limits on tax competition among jurisdictions.
The implementation plan included in the Annex targets a 2023 effective date for most aspects of both Pillar One and Pillar Two, with detailed rules to be developed over the coming months.
Read KPMG’s initial analysis of the October 2021 statement approved by the OECD/G20 Inclusive Framework: KPMG report: OECD/G20 Inclusive Framework agreement on BEPS 2.0 [PDF 535 KB]
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