OECD/G20 Inclusive Framework Global Tax Proposals: Pillars One and Two

Prompted largely by the ever-increasing size and importance of the global digital economy, the Organisation for Economic Co-operation and Development (OECD) is finalizing two major global tax proposals: (i)  Pillar One, changing the right for a taxing jurisdiction to impose income tax on multinational businesses groups (MNEs) from being based exclusively on physical presence in the jurisdiction to also be based on economic presence, and (ii) Pillar Two,  to require that  MNEs pay a  minimum rate of income tax for each taxing jurisdiction in which they have a physical presence.

The basic principles of Pillar One and Pillar Two were agreed to on October 8, 2021, by some 136 member jurisdictions of the OECC Inclusive Framework covering virtually all of the taxing jurisdictions in the world.

This program will review the scope, nexus, quantum, revenue sourcing, double taxation issue, tax certainty, and implementation related to Pillar One. With respect to Pillar Two, this program will provide a basic description, the scope, carve-outs, GloBE Rules, STTR Rules, and implementation. Overall, the program will benefit both tax attorneys and business attorneys who are involved in international business tax matters.

Learning Objectives: 

1. Identify current issues in the global taxation of the income of multinational businesses

2. Discuss the proposed changes under Pillar One and Pillar Two

3. Explore the status of the implementation of these proposed changes