On 14 March 2022 the OECD issued a request for public input on the implementation framework for the global minimum tax under Pillar Two of the OECD/G20 two-pillar international tax proposals. This follows the release of the Commentary on the global anti-base erosion (GloBE) Model Rules, providing multinationals and tax administrations with detailed technical guidance on the operation of the rules and the intended outcomes..

Drafting the Implementation Framework is the next stage in the planned procedures, as agreed in the detailed implementation plan issued in October 2021.

The Implementation Framework has been drafted to facilitate the implementation and administration of the GloBE rules in a coordinated manner. The framework will set out the administrative procedures in relation to the global minimum tax, including the filing obligations, and the multilateral review processes. The implementation framework also encompasses the development of safe harbours to facilitate compliance with the rules and to guide the tax administration.

Administrative guidance

Commentators are requested to specify any issues that should be the subject of further administrative guidance. They are invited to suggest the type of administrative guidance that could be given on such issues as part of the implementation framework.

Filing and record keeping

Comments are also requested on the arrangements for filing, information gathering, reporting systems and record keeping. Interested parties can give their views on the design of these systems under GloBE, and on how they can be drafted to achieve efficiency and accuracy of information reporting, without creating excessive compliance costs.

Simplification and safe harbours

Suggestions are invited from interested parties on any measures that could reduce compliance costs for multinationals. These cost savings could be achieved through simplification measures or through the use of safe harbours.

Rule coordination and tax certainty

Comments are invited on how the various rules can be co-ordinated, to reduce the risk of double taxation and increase tax certainty.

Use of commentator input

The comments received from interested parties in relation to the various issues set out in the request for input will be taken into consideration by the Inclusive Framework in deciding on its priorities when drafting the implementation framework for the GloBE. The implementation framework will be designed to achieve consistent outcomes for multinationals, avoiding any risk of double taxation.

Stakeholder input on issues of administration, operation, compliance and rule co-ordination will be critical in identifying the Inclusive Framework’s priorities in developing the GloBE Implementation Framework. They aim to produce a framework for implementation that is efficient for taxpayers and tax administrations and can ensure consistent and co-ordinated outcomes for MNE’s without the risk of double taxation.

Interested parties are invited to send their comments on the relevant issues by 11 April 2022, and a virtual public consultation meeting will be held at the end of April 2022.