Policy Perspectives update – Mauritius
On 1 July 2021, in an historic agreement, 130 countries approved a statement providing a framework for reform of the international tax rules. These countries are members of the OECD/G20 Inclusive Framework on BEPS (“IF”), comprising 139 countries. The statement sets forth the key terms for an agreement of a two-pillar approach to reforms and calls for a comprehensive agreement by the October 2021 G20 Finance Ministers and Central Bank Governors meeting, with changes coming into effect in 2023. Pillar One of the agreement is a significant departure from the standard international tax rules of the last 100 years, which largely require a physical presence in a country before that country has a right to tax. Pillar Two secures an unprecedented agreement on a global minimum level of taxation which has the effect of stipulating a floor for tax competition amongst jurisdictions.
The five-page statement reflects high-level agreement on key political questions and design features of Pillars One and Two following a two-day meeting of the IF. Of the 139 members of the IF, 130 had signed onto the statement as of its release. IF members that have not joined in the statement are: Barbados, Estonia, Hungary, Ireland, Kenya, Nigeria, Peru, St. Vincent and the Grenadines, and Sri Lanka. Several of these members (including Ireland and Hungary) had expressed concerns in the weeks leading up to the IF meeting.
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