The Organisation for Economic Cooperation and Development (OECD) today issued a release reaffirming its commitment to reach a consensus-based long-term solution to the tax challenges arising from the digitalisation of the economy, and stating that the OECD will continue working toward an agreement by the end of 2020.
According to an OECD release, participants of the Inclusive Framework on base erosion and profit shifting (BEPS) during a 29-30 January meeting agreed to pursue negotiations of new rules:
The unified approach agreed by the Inclusive Framework on BEPS draws heavily on the unified approach released by the OECD Secretariat in October 2019. Read TaxNewsFlash
Pillar One, possible “safe harbour” approach
Until now Inclusive Framework members have been considering three competing proposals to address the tax challenges of digitalisation.
A “Programme of Work” agreed in May 2019 has been replaced with a revised “Programme of Work” under Pillar One, that outlines the remaining technical work and political challenges to deliver a consensus-based solution by the end of 2020, as mandated by the G20 governments.
Inclusive Framework members will next meet in July 2020, at which time political agreement will be sought on the detailed architecture of this proposal.
A statement by the Inclusive Framework on BEPS [PDF 558 KB] takes note of a proposal to implement Pillar One on a “safe harbour” basis, as proposed in a December 2019 letter from the U.S. Treasury Secretary to the OECD Secretary-General. Read TaxNewsFlash
Read a January 2020 report prepared by KPMG's EU Tax Centre