Certain large multinationals may be subject to international tax changes including a minimum 15% global corporate income tax rate starting in 2023. The Organization for Economic Cooperation and Development (OECD) has now published model rules to help Canada and other jurisdictions to implement these changes as part of its two-pillar solution to address the tax challenges from digitalization and globalization of the economy. The Pillar Two model rules were issued on December 20, 2021.

As these rules are intended to be effective starting in 2023, multinational enterprises (MNEs) should prepare for these upcoming changes by continuing to monitor developments and the timing of legislative proposals in different jurisdictions. In addition, affected MNEs should model the potential impacts of these complex changes and evaluate conflicts with existing domestic rules to prevent double taxation or other inadvertent issues.

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