OECD: Extractives exclusion under Amount A of Pillar One; public consultation

Comments are requested by 29 April 2022.

Comments are requested by 29 April 2022.

The Organisation for Economic Cooperation and Development (OECD) today issued a release seeking public comments on the extractives exclusion 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 extractives exclusion will exclude from the scope of Amount A the profits from extractive activities when a multinational group derives revenue from the exploitation of extractive products and the group has carried out the relevant exploration, development, or extraction.
  • This approach reflects the policy goal of excluding the economic rents generated from location-specific extractive resources that should only be taxed in the source jurisdiction, while not undermining the comprehensive scope by limiting the exclusion in respect of profits generated from activities taking place beyond the source jurisdiction, or later in the production and manufacturing chain.

The OECD/G20 Inclusive Framework on BEPS agreed to the release of the public consultation document [PDF 302 KB], in order to solicit public comments, but as noted in today’s release, “… it does not reflect consensus regarding the substance of the document.” According to the OECD, the comments received will assist members of the Inclusive Framework in further refining and finalizing the relevant rules.

Comments are requested by 29 April 2022.

 

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