OECD: Multilateral convention to facilitate implementation of Pillar Two subject to tax rule
The convention is open for signature and jurisdictions interested in signing it are invited to contact the OECD Secretariat.
Multilateral convention to facilitate implementation of Pillar Two subject to tax rule
The Organisation for Economic Cooperation and Development (OECD) today released the new multilateral convention to facilitate the implementation of the Pillar Two subject to tax rule.
The convention is open for signature and jurisdictions interested in signing it are invited to contact the OECD Secretariat.
As explained by today’s OECD release:
- The OECD/G20 Inclusive Framework on BEPS concluded negotiations in September 2023 on the Multilateral Convention to Facilitate the Implementation of the Pillar Two Subject to Tax Rule (STTR MLI), which includes an explanatory statement.
- The Subject to Tax Rule (STTR) [PDF 2.2 MB] will enable developing countries to tax certain intra-group payments when those payments are subject to a nominal corporate income tax rate below 9%. The STTR allows source jurisdictions to impose a tax when they otherwise would be unable to do so under the provisions of tax treaties.
- The STTR MLI, which was delivered in the Outcome Statement [PDF 165 KB] on the two-pillar solution in July 2023, will allow countries to efficiently implement the STTR in existing bilateral tax treaties.
- More than 70 developing Inclusive Framework members are entitled to request inclusion of the STTR in their treaties with Inclusive Framework members that apply corporate income tax rates below 9% to covered payments.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.