OECD: Draft rules for tax base determinations under Amount A of Pillar One; comments requested

A release seeking public comments on the draft rules for tax base determinations under Amount A of Pillar One

Draft rules for tax base determinations under Amount A of Pillar One; comments requested

The Organisation for Economic Cooperation and Development (OECD) today issued a release seeking public comments on the draft rules for tax base determinations under Amount A of Pillar One—part of the ongoing work of the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) in implementing the two-pillar solution to address the tax challenges arising from the digitalisation of the economy.

As explained by today’s OECD release:

  • The purpose of the tax base determinations rules is to establish the profit (or loss) of an in-scope multinational entity (MNE) that will be used for the Amount A calculations to reallocate a portion of its profits to market jurisdictions.
  • The rules determine that profit (or loss) will be calculated on the basis of the consolidated group financial accounts, while making a limited number of book-to-tax adjustments.
  • The rules also include provisions for the carryforward of losses.

The OECD/G20 Inclusive Framework on BEPS agreed to the release of the public consultation document [PDF 1 MB], in order to solicit public comments, but as noted in today’s release, “…the draft rules do not reflect consensus regarding the substance of the document.” According to the OECD, the comments received on the draft rules will assist members of the Inclusive Framework in further refining and finalizing the relevant rules.

Comments are requested by 4 March 2022.

Read a KPMG report providing initial impressions about the public consultation document regarding the draft rules.

 

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