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OECD Secretariat Issues Consultation On the GloBE Proposal Under Pillar Two
Monday 11th November 2019
The OECD Secretariat has published a consultation document on certain aspects of the Global Anti Base Erosion Proposal under Pillar Two.
In May 2019, the OECD/G20 Inclusive Framework on BEPS agreed a Programme of Work for Addressing the Tax Challenges of the Digitalisation of the Economy and this has two pillars:
- Pillar One addresses the allocation of taxing rights between jurisdictions and considers various proposals for new profit allocation and nexus rules;
- Pillar Two (also referred to as the “GloBE” proposal) focuses on the remaining BEPS issues and seeks to develop rules that would provide jurisdictions with a right to “tax back” where other jurisdictions have not exercised their primary taxing rights or the payment is otherwise subject to low levels of effective taxation
The OECD Secretariat issued a consultation document on Pillar One proposals last month. To make progress towards reaching a consensus solution to Pillar Two issues, and following discussions by the Working Party No. 11 at its meeting on 9-10 October 2019 and by the Steering Group of the Inclusive Framework, has now released their consultation document on Pillar Two proposals to the public for comments.
The condoc focuses on specific technical issues in respect of the GloBE proposal, in particular:
- the use of financial accounts as a starting point for determining the tax base;
- the extent to which an MNE can combine income and taxes from different sources in determining the effective (blended) tax rate on such income, and
- stakeholders’ experience with, and views on, carve-outs and thresholds that may be considered as part of the GloBE proposal.
The comments provided will be used by the members of the Inclusive Framework in the development of a solution for its final report to the G20 in 2020.
The condoc has been prepared by the Secretariat and does not represent the consensus views of the Inclusive Framework, the Committee on Fiscal Affairs, or their subsidiary bodies.
Interested parties are invited to send their comments by 2 December 2019.
If you would like further detail on the above, please contact Keith Rushen on 0207 486 2378.Contact Us