Canadian companies may be affected by the OECD’s latest reports on taxing the digital economy.
As part of its ongoing work to address tax challenges arising from the digital economy, the OECD released two new reports, which it calls "blueprints", on it's proposed two-pillar approach on October 12, 2020. The blueprint for Pillar One, which deals with the allocation of taxing rights, is meant to provide a basis for political agreement across the Inclusive Framework of 137 countries.
The blueprint on Pillar Two, which addresses remaining BEPS challenges by ensuring that the profits of internationally operating businesses are subject to a minimum rate of tax, is also intended to provide a basis for a future agreement.
The OECD also released a 14-page public consultation document setting out questions on both Pillars. The OECD will accept written comments on these questions by December 14, 2020 and has scheduled public consultation meetings for January 2021. The OECD now hopes an agreement on taxing the digital economy can be reached by mid-2021 (previously an agreement was expected by the end of 2020).
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