On Tuesday 11 July, the Organisation for Economic Co-operation and Development (OECD) announced that 138 countries and jurisdictions that are members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) have signed an Outcome Statement on Pillar One regarding the taxation of multinational enterprises.
This statement recognises the significant progress that has been made and enables countries and jurisdictions to move forward with the implementation of the major reform of the international tax system. It summarises the expected results, which should lead to signature by the end of the year.
The statement includes, among other things, a multilateral convention drawn up by the Inclusive Framework, which allows jurisdictions to reallocate and exercise at national level a right to tax a defined portion of residual profits. The text of the convention will be published once it has been prepared for signature. There are still a few sticking points, notably Amount B, which aims to simplify and streamline the application of the arm’s-length principle to in-country baseline marketing and distribution activities and which still requires work at a technical level (see EUROPE 13214/22).
Contacted by EUROPE, the European Commission responded on Wednesday 12 July. It welcomes the technical agreement approved by the OECD’s inclusive framework. “This agreement paves the way for the implementation of a partial redistribution of taxing rights between participants, the simplification of transfer pricing and the reinforcement of legal certainty”, it declared.
“The signing of the multilateral convention is essential if we are to make progress on the historic two-pillar reform of international taxation agreed in 2021”, it added.
The French finance minister, Bruno Le Maire, also welcomed the news in a press release. “I call on all States to redouble their efforts to find a compromise on the remaining political issues to be discussed”, he added.
Read the outcome statement: https://aeur.eu/f/819 (Original version in French by Anne Damiani)