July 2021 - Changes are around the corner: The BEPS 2.0 Pillar 2 update

In November 2019, the OECD released the Global Anti-base Erosion (GloBE) proposal, the so-called Pillar 2 of the BEPS 2.0 project. On 12 October 2020, the G20/OECD Inclusive Framework on BEPS (“IF”) released two detailed “blueprints” in relation to its ongoing work to address the tax challenges arising from the digitalization of the economy (“Pillar 1”) and in relation to the tax rules designed to ensure that large multinational businesses pay a minimum level of tax on profits in all jurisdictions (“Pillar 2”). On 1 July 2021, 130 countries and jurisdictions, constituting vast majority of IF approved the “Statement on a Two-Pillar Solution to Address the Tax Challenges Arising From the Digitalization of the Economy” (the “Statement”). They agreed on a taxing right for market jurisdictions on at least 20% of the profits exceeding a 10% margin of large multinational enterprises (“MNE”) under Pillar 1 and a global minimum tax of at least 15% under Pillar 2.

The OECD’s aim is to finalize the technical details by October 2021 and bring both Pillars into effect in 2023.

We had issued a tax newsletter to comment on Pillar 1 initiation in January 2021. We would comment on Pillar 2 in this tax newsletter.

For more information, please download our newsletter to read more.

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July 2021 - Changes are around the corner_​The BEPS 2.0 Pillar 2 update.pdf

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