OECD sees global corporate tax overhaul on course for 2024

Secretary-Normal of the Organisation for Financial Co-operation and Improvement (OECD) Mathias Cormann speaks throughout a information assertion after opening ceremony of the OECD assembly on the Itamaraty Palace in Brasilia, Brazil June 21, 2022. REUTERS/Adriano Machado

PARIS, July 11 (Reuters) – The largest overhaul of cross-border tax guidelines in a era is now on target to take impact in 2024, the Organisation for Financial Cooperation and Improvement mentioned on Monday in an replace on the mission for G20 finance ministers.

The shake-up, which has been shepherded by the OECD and which almost 140 nations agreed to final 12 months, goals to take higher account of the emergence of huge digital firms, comparable to Apple (AAPL.O) and Amazon (AMZN.O) that may guide income in low-tax nations.

The primary pillar of the two-track reform goals to reallocate 25% of income from the world’s largest multinationals for taxation within the nations the place their shoppers are whatever the firms’ bodily location. The second pillar goals to set international minimal company tax fee of 15%.

Each pillars have been initially on account of be applied subsequent 12 months, though that was at all times seen as extremely bold given the issue of agreeing advanced adjustments to many nations’ tax legal guidelines.

“We are going to hold working as shortly as doable to get this work finalised, however we may also take as a lot time as essential to get the principles proper,” OECD Secretary Normal Mathias Cormann mentioned in assertion.

“These guidelines will form our worldwide tax preparations for many years to come back,” he added.

The OECD mentioned in a report for G20 finance ministers this week in Bali that the brand new timetable for the primary pillar set a tough mid-2023 deadline for sign-off on the multilateral authorized framework underpinning it so it might probably enter into pressure in 2024.

In the meantime, it mentioned most nations have been planning laws to undertake the worldwide minimal tax fee in order that it additionally enters into pressure in 2024.

Reporting by Leigh Thomas
Enhancing by Tomasz Janowski

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