Countries agree on finalised framework for OECD’s Two-Pillar global tax reform
A total of 136 countries have agreed to the final framework for the OECD’s new global corporate tax rules, which will affect giant tech companies including Google, Apple, Facebook, and Amazon.
The October agreement – the so-called Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy with a Detailed Implementation Plan – updated and finalised the agreement which 131 countries agreed to in July. There were three important developments.
First, the rate of the minimum tax under Pillar Two is now set at 15%. Second, there is now a detailed implementation plan in place. Third, new countries have agreed to sign up to the new tax rules. These include Ireland, the country which opposed the new rules the most.
‘Today’s agreement will make our international tax arrangements fairer and work better. This is a major victory for effective and balanced multilateralism. It is a far-reaching agreement which ensures our international tax system is fit for purpose in a digitalised and globalised world economy,’ OECD Secretary-General Mathias Cormann said. ‘We must now work swiftly and diligently to ensure the effective implementation of this major reform.’
The agreement is supported by all OECD and G20 countries, except Kenya, Nigeria, Pakistan, and Sri Lanka.
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