Under the guidance of the OECD, 136 states of the 140 member states of the OECD/G20 Inclusive Framework on BEPS have agreed on to introduce the two-pillar solution on taxing businesses in the course of the digitalization of the economies. A corner piece of the solution is that multinational enterprises will be subject to a minimum income taxation of 15 percent from 2023 onwards.
The agreement is expected to enable countries to collect additional USD 150 billion in tax revenues. Pillar One is to provide for a more consistent and fair distribution of taxing rights (nexus rules) with the focus on so-called “market countries”, i.e. where digital business is approaching its users and customers. Some taxing rights are reallocation from the home countries of MNEs to the markets where business activities are performed.
Pillar Two introduces the minimum corporate tax rate at 15% applicable to MNEs which amount to revenues of EUR 750 million or more. It is also assumed that such minimum taxation will stabilize the international tax system and to increase tax certainty.
The press release of the OECD can be found here:
For more information at the OECD, go to OECD/BEPS Program:
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