Multilateral convention to implement Amount A of Pillar One; implementation handbook for Pillar Two global minimum tax

OECD released text of a new multilateral convention to implement Amount A of Pillar One

OECD released text of a new multilateral convention to implement Amount A of Pillar One

The Organisation for Economic Cooperation and Development (OECD) today released the text of a new Multilateral Convention to Implement Amount A of Pillar One [PDF 1.7 MB] that updates the international tax framework to co-ordinate a reallocation of taxing rights to market jurisdictions, improve tax certainty, and remove digital service taxes—part of the ongoing work of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) in implementing the two-pillar solution to address the tax challenges arising from the digitalisation of the economy.

As explained by today’s OECD release,

  • The Multilateral Convention to Implement Amount A of Pillar One (MLC), which provides for a coordinated system of taxation and sets out the substantive features necessary for it to be prepared for signature (including its scope and operation), is accompanied by an Explanatory Statement [PDF 5.2 MB], an Understanding on the Application of Certainty of Amount A [PDF 427 KB] and an Overview [PDF 1 MB].
  • In addition, the OECD released an Update to the economic impact assessment of Pillar One, which estimates that taxing rights on about USD 200 billion in profits are expected to be reallocated to market jurisdictions each year under Pillar One. This is expected to lead to annual global tax revenue gains of between USD 17‑32 billion (based on 2021 data), with low and middle-income countries expected to gain the most as a share of existing corporate income tax revenues.
  • The MLC reflects the current consensus achieved among members of the Inclusive Framework, although there are different views on a handful of specific items noted in footnotes by a small number of jurisdictions, who are constructively engaged in resolving these differences.
  • The MLC will be delivered to G20 Finance Ministers and Central Bank Governors in a new OECD Secretary-General tax report ahead of their meeting in Morocco this week.

Implementation handbook for Pillar Two global minimum tax

The OECD also today released a new Minimum Tax Implementation Handbook [PDF 1.5 MB] to assist governments as they consider moving forward with the global minimum tax under Pillar Two. It provides an overview of the key provisions of the rules and the considerations to be taken into account by tax policy and administration officials and other stakeholders in assessing implementation options.



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