OECD releases progress report on Pillar One of new global tax rules

OECD progress report on Pillar One of new global tax rules focuses on design of Amount A. Further agreement needed before inclusion in multilateral convention. Rules aim to distribute profits more fairly, requiring large companies to pay taxes on profit exceeding 10% of revenue. Public consultation on report open until August 19, 2022.

The OECD has released a progress report on Pillar One of the new global tax rules, and specifically on the design of the so-called Amount A. The report confirms the need for further agreement before it is ready to be reflected in a multilateral convention. The convention will also include rules for withdrawing existing unilateral digital services taxes, which have been sprouting in many jurisdictions.

The rules under Pillar One will ensure that profits are distributed more fairly. Those very large companies, which generate billions in revenues will have to pay taxes on 25% of the profit they make above a 10% threshold of revenue – a threshold referred to as Amount A.

The public consultation on the progress report is open until 19 August 2022.