OECD Proposal for a new tax order – Comments on Pillar I and Pillar II
Is the “Unified Approach” equal to BEPS 2.0 or a new way of allocating profits between source and market jurisdictions to end the arm’s length principle?
Do the proposals represent a new inclusive global grand bargain that will finally stem the tide of unilateral actions in our uncertain world?
The tax challenges of the digitalisation of the economy were identified as one of the main areas of focus of the Base Erosion and Profit Shifting (BEPS) Action Plan, leading to the 2015 BEPS Action 1 Report. Policy discussion on those challenges remain an important part of the international agenda.
The OECD/G20 Inclusive Framework on BEPS provides for two pillars to be developed with a consensus solution to be agreed upon by the end of 2020.
Pillar One focuses on the allocation of taxing rights and seeks to undertake a coherent and concurrent review of the profit allocation and nexus rules. The proposals articulated so far, would entail solutions that go beyond the arm’s length principle. To help expedite progress towards reaching a consensus solution to Pillar One issues, the Secretariat prepared a proposed “Unified Approach” for public consultation.
Click here to download our Comments on Pillar I