Negotiations on Pillar One of the OECD agreement on the taxation of multinationals are well underway, according to a report from the European Commission given to the EU Council on Friday 30 June.
“The Commission welcomes the great efforts and the progress made so far and urges all participants to make a final effort to reach an agreement on the multilateral convention to implement Pillar One”, it says. By way of a reminder, Pillar Two, which introduces a minimum tax rate of 15%, is currently being implemented. Pillar One comprises a new system for allocating tax rights to multinationals.
This text is in line with the optimistic statements made by Paolo Gentiloni, Commissioner for Economy, to MEPs on the Committee on Economic and Monetary Affairs (ECON) (see EUROPE 13212/17).
The report states: “It provides a window of opportunity to reach a historical agreement in the area of international taxation and complete the work on the Two-Pillar Solution of the October 2021 statement”. “The Commission will do its utmost to ensure a timely and consistent implementation of Pillar One at EU level”, assured the institution.
The first part (‘Amount A’), which provides a new taxing right over a portion of the residual profits, has already been agreed and is currently being translated. ‘Amount B’, which aims to simplify and streamline the application of the arm’s-length-principle to in-country baseline marketing and distribution activities, still requires work at a technical level.
The OECD Secretariat aims to finalise the technical work by Wednesday 12 July and present the package of the multilateral convention and the explanatory statement.
Read the report: https://aeur.eu/f/7vk (Original version in French by Anne Damiani)