OECD/G20 Inclusive Framework Advances Two-Pillar Tax Reform Implementation

UAE, 19 June, 2024 : The OECD/G20 Inclusive Framework on BEPS has released supplementary elements for the implementation of the Two-Pillar Solution to address global tax challenges.

Pillar One: Amount B

The report on Amount B, focusing on the arm's length principle for marketing and distribution activities, was published on 19 February 2024. New guidance includes:

• Definitions for qualifying jurisdictions under Amount B.
• The political commitment for covered jurisdictions to respect and facilitate the simplified approach outcomes to prevent double taxation.

Further work on the Pillar One package is ongoing.

Pillar Two: Global Minimum Tax

The Inclusive Framework has also issued new guidance to streamline the global minimum tax application:

• Administrative Guidance: Simplifies procedures for MNE Groups on deferred tax liabilities, allocation of cross-border taxes, and treatment of securitisation vehicles.
• CbCR Safe Harbour Guidance: Ensures consistent treatment of intragroup payments under the GloBE Rules.
• Qualified Status: A streamlined process for recognising jurisdictions with qualified GloBE Rules, providing MNEs with certainty on compliance requirements.

These updates aim to enhance tax certainty and simplify implementation for jurisdictions and multinational enterprises. 

Source : www.oecd.org