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The OECD’s International Tax Overhaul Reaches A Pivotal Moment

Written by , Posted in Taxes
Originally published in IFC Review

Efforts to radically reorganise global corporate taxation passed a major milestone when the European Union unanimously agreed to implement Pillar 2, the 15 per cent global minimum tax component of the Organisation for Economic Cooperation and Development’s (OECD) dual-pillared campaign, at the end of last year. While the 138 nations then in the “Inclusive Framework on Base Erosion and Profit Shifting (BEPS)” reached agreement in October 2021 on the minimum tax, along with the Pillar 1 system reallocating tax rights to jurisdictions in which companies make sales but have no physical presence, there were questions regarding if and when domestic implementation would begin to follow.

Can low-tax jurisdictions finally rest easy? Sure, they will have to adjust to the new minimum tax and other rules, but is the bureaucratic hand-wringing from the G20 and OECD finally at an end? Perhaps it is, but how often is a crocodile really appeased if you feed it just one hand?