On Wednesday 11 October, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting published the text of a new multilateral agreement to implement Amount A of Pillar One of the International Tax Reform (see EUROPE 13264/23).
This convention is intended to update the international tax framework to co-ordinate a reallocation of taxing rights to market jurisdictions to tax the profits of the largest and most profitable multinational enterprises operating in those markets, regardless of their physical presence.
It must also ensure the repeal of taxes on digital services and other similar relevant measures, prevent their proliferation, put in place mechanisms to avoid double taxation and reinforce stability and legal certainty within the international tax system.
The publication of the convention marks a step forward for the international community in finalising the two-pillar solution to the tax challenges posed by globalisation and the digitalisation of the economy.
This text “provides governments with the basis for the co-ordinated implementation of this fundamental reform to the international tax system and represents significant progress towards opening the Convention for signature”, commented OECD Secretary-General Mathias Cormann.
“Countries now have the means to swiftly move forward with the steps necessary to secure signature and ratification, and we are ramping up our support for developing countries, to ensure we can deliver on our goal of making the international tax system fairer and work better in the digitalised world”, he added.
To read the agreement, go to https://aeur.eu/f/90t (Original version in French by Anne Damiani)