On 18 February 2022 the OECD presented its tax report for the G20 Finance Ministers and Central Bank Governors. The main parts of the report are summarised below.
Two-Pillar International Tax Package
In October 2021 the OECD Inclusive Framework members agreed to a detailed implementation plan, and in November 2021 they finalised the technical design of the model rules to implement the minimum tax. The Commentary on the GloBE rules is to be finalised and the draft model provision for the Subject to Tax Rule (STTR) and its commentary will be released in March 2022. Work is also continuing on a public discussion draft on the multilateral instrument for the implementation of the STTR, which is the treaty-based element of Pillar Two.
On 17 January 2022 negotiations began on agreeing the multilateral convention for implementation of Pillar One, and this is to be signed by mid-2022. Public consultations have been launched and will cover the various building blocks of Pillar One on a rolling basis.
An implementation framework is being developed in relation to Pillar Two. This this will include administrative and compliance issues and rules on safe harbours. A public consultation on the implementation framework will take place in March 2022. Public consultations on the STTR will take place later in 2022.
Carbon pricing
The OECD has proposed an initiative, similar to the Inclusive Framework, that can facilitate discussion on implicit and explicit carbon pricing. Countries could work together on a transparent measurement framework that would allow comparison of climate mitigation policies and evidence-based analysis. The focus on data, analysis and a transparent methodology would support further understanding and discussion.
Tax and gender policy
The OECD has prepared a report looking at approaches to tax policy and gender outcomes, using input from 43 countries of the G20 and OECD. The report notes that gender equality is an important part of tax policy in most of the countries. The taxation of labour is seen as an important area for further improvement of tax systems to promote gender equality.
Tax and development
The OECD is preparing a roadmap to record the progress achieved by developing countries in international tax reform. The roadmap looks at priorities identified by developing countries and the effect of the implementation of the two-pillar international tax package on the use of tax incentives.
In addition to the continuing development work, the OECD is providing technical assistance to support countries with limited administrative capacity in the implementation of the two-pillar international tax agreement. The OECD is also assisting developing economies in relation to the VAT challenges of the growth in e-commerce.
Tax transparency
The OECD is designing a tax reporting and exchange framework to analyse tax compliance risks from the growth of crypto-assets. This new reporting framework is to be released for public consultation in the near future together with a proposed revision of the common reporting standard (CRS).
BEPS minimum standards and taxation of multinationals
Peer review monitoring reports continue to be completed in relation to the minimum standards under the action plan to combat base erosion and profit shifting (BEPS).
The Multilateral Convention to Implement Tax Treaty Related BEPS Measures (MLI) now covers 99 jurisdictions and around 1,850 double tax treaties.
In December 2021 the OECD published more transfer pricing country profiles. In total the profiles now provide information on the transfer pricing systems of 63 countries.
