KPMG report: Amount B—the forgotten piece of the Pillar One jigsaw

A KPMG report that discusses Amount B, which is a crucial part of the two-pillar reform

A KPMG report that discusses Amount B, which is a crucial part of the two-pillar reform

In October 2021 the OECD/G-20 inclusive framework on base erosion and profit shifting (BEPS) released a statement outlining the contours of a two-pillar international tax reform—which has been agreed to by 137 members of the inclusive framework, including every major global economy, and which if implemented would amount to the most radical reform of the international corporate tax system since its foundations were established by the League of Nations in the 1920s.

To date, most businesses have understandably been focused on Pillar Two—a complex toolbox of minimum effective tax rules that countries can implement starting in 2023 and which will apply to multinational businesses with more than €750 million in annual revenue. In contrast, there has been less focus on Pillar One. The Pillar One technical work is significantly behind that of Pillar Two; the OECD is still in the midst of releasing discussion drafts for public consultation. In addition, the core part of Pillar One—Amount A—would apply only to businesses with more than €20 billion in revenue and a profit margin of 10 percent, a select group of approximately 100 companies globally. What is often missed is that Pillar One is itself a two-part deal, and although Amount A is limited to 100 companies, there are no similar limits on Amount B.

Read a July 2022 report* [PDF 440 KB] prepared by KPMG LLP that discusses Amount B, which is a crucial part of the two-pillar reform but has been largely absent from public attention in recent months amid a flurry of activity on Pillar Two and Amount A.

*Originally appearing in Tax Notes International (July 11, 2022) and reprinted with permission of the publisher.


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