OECD: Report on BEPS 2.0, including new guidance on Pillar Two rules

Package of deliverables on remaining elements of two-pillar solution to address the tax challenges arising from the digitalisation of the economy

Package of deliverables on remaining elements of two-pillar solution

The Organisation for Economic Cooperation and Development (OECD) today released the OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors [PDF 1.3 MB]. The Report follows the agreement last week by 138 countries and jurisdictions on an Outcome Statement [PDF 165 KB] that summarized the package of deliverables developed by the Inclusive Framework on the remaining elements of the two-pillar solution to address the tax challenges arising from the digitalization of the economy.

As explained by today’s OECD release, these deliverables include:

  • A framework for the simplified and streamlined application of transfer pricing rules to certain marketing and distribution activities under Amount B of Pillar One, for which the OECD today launched a public consultation running through 1 September 2023 (read TaxNewsFlash), with a view to agreeing a final Amount B report by year-end and incorporating key content into the OECD Transfer Pricing Guidelines by January 2024. 
  • Subject to Tax Rule (STTR) [PDF 2.2 MB], which will enable developing countries to update bilateral tax treaties to “tax back” in respect of certain intra-group income where such income is subject to low or no nominal taxation in the other jurisdiction.
  • Text of a multilateral convention (MLC), which allows jurisdictions to reallocate and exercise a domestic taxing right over a portion of a multinational enterprise’s residual profits. The Inclusive Framework will publish the text of the MLC once it has been prepared for signature, upon resolution of a small number of specific items about which a few jurisdictions have expressed concerns.
  • Additional guidance on global anti-base erosion (GloBE) items including:
    • The GloBE Information Return [PDF 1.3 MB], which includes simplified reporting requirements and that will form part of a centralized filing and exchange framework.
    • Further Administrative Guidance [PDF 1 MB] including two new safe harbors, one for jurisdictions that introduce a qualified domestic minimum top-up tax (QDMTT) and a transitional undertaxed profits rule (UTPR) safe harbor, under which the UTPR top-up tax in the jurisdiction of a company’s ultimate parent entity will be zero if that jurisdiction has a corporate tax rate of at least 20%, for fiscal years commencing on or before 31 December 2025. The document also includes detailed administrative guidance on currency conversion rules, the substance- based income exclusion, and further guidance on the treatment of tax credits.  


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