On Monday 5 January, the 147 countries and jurisdictions collaborating within the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) approved the key elements of a package to ensure the coordinated operation of global minimum tax arrangements.
After several months of negotiations, the agreement for a “side by side” arrangement (see EUROPE 13670/7) should preserve the gains achieved under the global minimum tax framework and protect the ability for all jurisdictions, particularly developing countries, to have first taxing rights over income generated in their jurisdictions.
The agreement includes a series of simplification measures designed to reduce compliance burdens for multinational enterprises and tax authorities in calculating and reporting under the global minimum tax rules. It improves alignment in the treatment of tax incentives globally through the introduction of a new, targeted substance-based tax incentive safe harbour. In addition, it introduces new safe harbours for multinational enterprises whose parent entity is located in an eligible jurisdiction that meets minimum taxation requirements. It includes carrying out an evidence-based stocktake process. Finally, it provides for the qualified minimum top-up tax regimes to be levied locally, guaranteeing the protection of local tax bases, particularly in developing countries.
Additional tools and fact sheets relating to the overall agreement and its implementation will be distributed in the coming weeks.
Read about the project: https://aeur.eu/f/k60 (Original version in French by Anne Damiani)