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March 5, 2021

OECD issues report to G20 finance ministers and Central Bank governors and hosts webcast on the outcomes of the G20 meeting and other tax developments

Executive summary

On 26 February 2021, the first G20 Finance Ministers and Bank Governors meeting was held under the Italian Presidency. In advance of this meeting, the Organisation for Economic Co-operation and Development (OECD) presented a report to the G20 Finance Ministers and Bank Governors. Subsequently, the OECD held one of their regular Tax Talks webcasts.

The OECD's Secretary-General Report to G20 Finance Ministers and Central Bank Governors (the report) consists of two parts; Part I of the report is an update on the activities with respect to the OECD's international tax agenda, including an update on the work to address the tax challenges arising from the digitalization of the economy (the Base Erosion and Profit Shifting (BEPS) 2.0 project). Part II is a progress report to the G20 by the Global Forum on Transparency and Exchange of Information for Tax Purposes.

During the G20 Finance Ministers and Central Bank Governors virtual meeting, there was continued support for the aim to reach global agreement on both pillars of the BEPS 2.0 project on addressing the tax challenges arising from the digitalization of the economy (BEPS 2.0) by mid-2021.

On 4 March 2021, the OECD held the 18th Tax Talks webcast. Members of the OECD Secretariat provided an overview of the outcomes of the G20 Finance Ministers meeting and an update on the OECD's international tax work.

Detailed discussion

G20 meeting

The G20 Finance Ministers and Central Bank Governors virtually met on 26 February 2021, for the first time under the Italian G20 Presidency and with a representative of the Biden administration presenting the United States (US) perspectives. Treasury Secretary Janet Yellen had sent a letter to her G20 colleagues prior to the meeting reinforcing the need and support for international cooperation. According to the press release on of the meeting, the G20 committed to endeavor to achieve a global and consensus-based solution on the two-pillar reform of the international tax rules, the so-called digital tax or BEPS 2.0 project, by mid-2021. It was also reported that US Treasury Secretary Janet Yellen indicated during the meeting that the US is "no longer advocating for safe harbor implementation" of Pillar One and "will engage robustly to address both pillars of the OECD project, the tax challenges of digitization and a robust global minimum tax.”

OECD report to G20

In advance of the G20 virtual meeting, the OECD provided a two-part report with updates on the international tax agenda and the progress of the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum).

Part I: The OECD’s International Tax Agenda

Part I of the report provides an update on the activities and plans with respect to the OECD's international tax agenda, with a particular focus on the work of the OECD/G20 Inclusive Framework on BEPS (the Inclusive Framework). Part I is divided into six sections:

1.     Addressing the tax challenges arising from the digitalization of the economy

2.     Response to COVID-19

3.     Tax and environment

4.     Implementing the Base Erosion and Profit Shifting (BEPS) measures and tax certainty

5.     Tax transparency developments

6.     Capacity building — Supporting developing countries

Addressing the tax challenges arising from the digitalization of the economy

The report states that during the course of 2020, despite the COVID-19 pandemic, significant progress was made on the BEPS 2.0 project. In October 2020, the Inclusive Framework approved a package1 that includes reports on the Pillar One2 and Pillar TwoBlueprints and other documents. The Inclusive Framework described the report on the Blueprint for Pillar One as a “solid basis for future agreement” and the report on the Blueprint for Pillar Two as “a solid basis for a systemic solution that would address remaining BEPS challenges.” Following the October 2020 package, a public consultation was held on the Pillar One and Pillar Two Blueprints.4 The report states that since the public consultation, the Inclusive Framework is continuing to work to further refine and simplify the Pillar One and Pillar Two proposals, with the objective of reaching a political agreement by mid-2021.

The report also provides an update on other work related to digitalization. It notes that the OECD continues to advance its work to support developing countries seeking to implement the recommended solutions for the collection of value-added tax (VAT) on digital trade by providing toolkits and technical assistance. The report states that the OECD will continue to work on detailed technical proposals for a new tax reporting framework for crypto-assets, with a view to presenting a comprehensive implementation package to the G20 later in 2021. Regarding the digital transformation of tax administrations, in December 2020, the Forum on Tax Administration (FTA) published a discussion paper titled Tax Administration 3.0, which sets out a vision of how tax collection may be administered in the future given the new possibilities created by the digitalization of the economy. The report notes that the FTA is in the process of developing an action plan to identify the priority areas for future FTA work, including identification of areas where international standardization could be beneficial, such as digital identity, e-invoicing and secure mechanisms for the real-time sharing of information across borders.

Response to COVID-19

The report discusses the OECD's work related to tax policy responses to the COVID-19 crisis. At the request of the Saudi Arabian G20 Presidency in 2020, the OECD took stock of jurisdictions’ tax and fiscal policy responses to the COVID-19 crisis and developed a policy framework. Also, the report states that throughout the crisis, the FTA published COVID-19 related planning guidance and will continue to undertake more in-depth work, including work on the considerations for effective remote working, strategies to ease burdens on small and medium size enterprises and ways to accelerate the digital transformation of tax administrations.

The report also provides an overview of the recently published guidance on the transfer pricing implications of the COVID-19 pandemic issued in December 20205 and the updated guidance on tax treaties and the impact of the COVID-19 pandemic issued in January 2021.6

Tax and environment

The report provides an update on work in the area of tax and environment. In January 2021, the OECD published a report titled Taxing Energy Use for Sustainable Development. The report examines energy taxation in 15 developing and emerging economies in Africa, Asia and Latin America and the Caribbean. The report states that well-designed energy and carbon taxes can strengthen efforts to improve domestic revenue mobilization, albeit to varying degrees across countries.

Also, the OECD regularly publishes two flagship reports on carbon pricing with respect to effective carbon rates and taxing energy use. The report notes that in April 2021, the OECD will release the update of the effective carbon rates report, together with a new benchmarking methodology for carbon pricing.

In addition, the report indicates that the International Monetary Fund (IMF) and OECD are joining efforts to provide metrics on carbon pricing and are bringing together their expertise on the challenges of introducing carbon pricing and how to overcome them. The IMF and OECD will present an initial report at the next meeting of the G20 in April 2021. The work also is expected to form the basis for discussions at the G20 Tax Symposium scheduled for 8 July 2021, which will focus on tax and environment.

Implementing the BEPS measures and tax certainty

The report states that the Inclusive Framework continues to make progress on implementing the four BEPS minimum standards, despite the constraints imposed by the ongoing pandemic.

With respect to Action 5 (Countering harmful tax practices), the report indicates that implementation of the minimum standard has continued to advance. In 2021, the OECD Forum on Harmful Tax Practices (FHTP) will continue its reviews of preferential regimes and the peer reviews on tax rulings, for which updated terms of reference and a streamlined methodology were agreed for the 2021-25 period.7 In addition, the report notes that the FHTP will conduct its first effectiveness review for the 12 jurisdictions identified as no or only nominal tax in relation to their implementation of the substantial activities standard, pursuant to which required exchanges of information are set to start in March of this year.

With respect to Action 6 (Preventing treaty abuse), the report states that the key tool to implement the minimum standard, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI), has been signed by 95 jurisdictions to date. The report states that the 2020 peer review report reveals an important difference in the progress made between the jurisdictions that had ratified the MLI before October 2020 and the others. Also, the report announces that on 17 February 2021, the Inclusive Framework approved a revised peer review process for Action 6, which includes a recommendation to formulate a plan for introduction if such a plan is not already in existence. Also included is a recommendation that a jurisdiction that is using the MLI to implement the minimum standard complete the steps to have it take effect for its agreements.

With respect to Action 13 (Transfer pricing documentation and Country-by-Country (CbC) Reporting), the report notes that jurisdictions continue to introduce CbC reporting filing obligations for MNEs, with currently over 90 jurisdictions having introduced these obligations. Also, following the 2020 review of the CbC reporting standard, the report states that agreement on the changes to be made to the standard should be reached later in 2021.

With respect to BEPS Action 14 (Improving Mutual Agreement Procedures (MAP)), the report describes the peer review process as showing that countries are updating their treaties and greatly improving their MAP frameworks, including by making more resources available to their tax administrations to improve the speed and quality of MAP. The report indicates that the Inclusive Framework is considering the input received during the public consultation on the Action 14 BEPS minimum standard that was held in early February 20218 and is seeking to achieve agreement on any modifications to the minimum standard, reporting of MAP statistics and the assessment methodology later in 2021. The report also provides an update on the release of the 2019 MAP Statistics and the presentation of the 2019 MAP awards in November 2020.9

In addition, the report provides a brief update on the OECD tax certainty agenda, including the recent developments in relation to the OECD FTA's International Compliance Assurance Programme (ICAP)10 and the work conducted by the FTA to promote joint audits of tax administrations.

Tax transparency developments

The report provides an update on the work that has recently taken place on tax transparency issues. In December 2020, the Global Forum published the first peer reviews of the implementation of the automatic exchange of information (AEOI) standard. The second stage of the peer review process, now underway, will assess the effectiveness in practice of AEOI.

According to the report, almost all committed jurisdictions have commenced exchanges. Two jurisdictions (Sint Maarten and Trinidad and Tobago) have not yet exchanged information because their legal implementation is ongoing. Two jurisdictions (Dominica and Niue) have not yet exchanged information because their technical implementation is ongoing. The report also states that in total 105 jurisdictions were due to exchange information by the end of 2020 and that this figure is set to increase to 115 jurisdictions by 2023, with Albania, Ecuador, Georgia, Jordan, Kazakhstan, Kenya, Maldives, Montenegro, Morocco, and Thailand committed to starting exchanges in the coming years.

In addition, the report provides an update on the list of jurisdictions that have not satisfactorily implemented the tax transparency standards. In October 2020, the OECD had reported to the G20 that five jurisdictions had failed to comply (Anguilla, Dominica, Niue, Sint Maarten and Trinidad and Tobago). According to the report, no further jurisdictions have received a non-compliant rating in the Exchange of Information on Request (EOIR) reviews.

Capacity building — Supporting developing countries

The report states that the OECD continues to work to ensure that developing jurisdictions benefit from the tax transparency and BEPS standards and are part of the discussions on the BEPS 2.0 project. Although the circumstances of the COVID-19 crisis have presented some challenges to capacity building efforts, the delivery of this work has pivoted to virtual channels.

According to the report, 43 bespoke induction programs have been launched to date to support new members of the Inclusive Framework in the implementation of their BEPS priorities and building capacity. In addition, bilateral technical assistance and capacity building support on BEPS to increase domestic resource mobilization has been carried out or is ongoing in 41 developing countries. The report notes that during the course of 2020, efforts to ramp up e-learning offerings have been redoubled, with new modules available on beneficial ownership, enterprise risk management, business continuity for tax administrations and tax administration responses to COVID-19. In 2020, over 30,000 tax officials were trained through the entire set of offerings of capacity building activities, including both bilateral and multilateral virtual training and e-learning modules.

The report also provides an update on the activity of the Platform for Collaboration on Tax (PCT) and notes that the PCT website launched in 2020 has been updated to provide information on individual projects and to offer toolkits, publications, and practical guidance on tax issues, including the latest tax knowledge resources related to COVID-19 responses.

Part II: Progress report by the Global Forum on Transparency and Exchange of Information for Tax Purposes

Part II of the report provides a summary of the key milestones of the Global Forum over the last six months.

The report indicates that substantial progress has been achieved in the past years in making AEOI a truly global standard. Today 115 jurisdictions are committed to exchanging financial account information automatically by 2023. The report also notes that the first results of the AEOI peer reviews, released in December 2020, confirm that the legal frameworks put in place to implement the AEOI standard are generally of high quality and incorporate the key requirements.

The report further describes the ongoing work on EOIR. Half of the Global Forum members (81 out of 162) have now been reviewed in the second round of EOIR peer reviews and the ratings assigned are generally good. The COVID-19 pandemic has impacted the work on EOIR and the launch of new EOIR peer reviews was paused for nine months in 2020 due to the cancellation of on-site visits. The process resumed following the adoption of the changes in the methodology by the Global Forum in December 2020, under which the EOIR peer reviews will focus on the legal and regulatory framework, with the effectiveness in practice to be assessed when on-site visits can be resumed.

In addition, to respond to the increased demand for capacity building support during the COVID-19 pandemic, the Global Forum focused on remote assistance, virtual meetings and training sessions, as well as developing other new tools. The Global Forum’s assistance has been delivered to 70 jurisdictions in 2020 and over 7,500 officials from 157 jurisdictions have been trained through virtual training and e-learning.

OECD tax talk

On 4 March 2021, the OECD hosted its 18th Tax Talk webcast, during which members of the OECD Secretariat provided updates on the OECD's international tax work. The webcast agenda included the following topics:

1.     Update on the G20 developments

2.     BEPS 2.0 update on Pillar One and Pillar Two

3.     Tax Policy

4.     COVID-19 response – tax treaties and transfer pricing

5.     BEPS implementation and tax transparency

6.     Tax and crime

7.     Forthcoming publications

On the topic of BEPS 2.0, the speakers summarized the state of play on the two-pillar approach. The speakers referred to the reports regarding the discussion of the G20 Finance Ministers and Central Bank Governors meeting and noted the letter sent by US Treasury Secretary Yellen. They also described the aim of reaching agreement during an Inclusive Framework meeting that will take place shortly before the G20 meeting to be held on 9 July 2021. In addition, they noted that the BEPS 2.0 project will be discussed during the next G20 Finance Ministers meeting, which will be held on 7 April 2021.

At the end of the webcast, the OECD speakers responded to some questions raised by the audience. On a question regarding whether Pillar One and Pillar Two could be decoupled, they noted that they do not envisage such possibility at this moment, stressing that the two Pillars “travel” together. On another question regarding the timeline of implantation of the two Pillars if there is agreement, they indicated that they expect that Inclusive Framework member jurisdictions would want implementation to move quickly following agreement.

The OECD speakers also highlighted upcoming deliverables, including an OECD-IMF report on carbon pricing (April 2021), an updated report on tax policy in response to the COVID-19 crisis (April 2021), an updated public database of tax policy responses to the COVID-19 crisis across the OECD and G20 (spring 2021), a new tax reporting framework for crypto-assets (2021), updates to the BEPS minimum standards (2021) and updates to the common reporting standard (2021/2022).


The OECD report to the G20 and the OECD webcast provided a broad update on the full range of the current and future G20/OECD tax work. The information provided makes clear that this is an important time in many aspects of this tax activity, including the work on the BEPS 2.0 project, which the OECD Secretariat described as the biggest priority, as well as the work on addressing climate change and other environmental challenges and on exchange of tax information around the world.

Tax professionals are encouraged to review the report and evaluate how the potential changes being developed could impact their companies. Also, companies may want to consider engaging with the OECD and policymakers at both national and multilateral levels on the business implications of the proposals. Given the significant implications of the international tax changes under discussion, companies should monitor OECD developments closely over the coming months.

In addition, the OECD is preparing for a new Secretary-General effective 1 June 2021, anticipating the departure of the current Secretary-General, Angel Gurria. The selection process started in September 2020 and an announcement on the new Secretary-General is expected to be made in March 2021, with two candidates now remaining: Mathias Cormann, who formerly served as Australian Finance Minister, and Cecilia Malmström, who formerly served as the European Union Commissioner for Trade and earlier as Swedish Minister for European Affairs. The decision regarding the next Secretary-General is likely to have implications for the role that the OECD will take in facilitating negotiations in many areas, including trade, digital and environmental tax. Companies may want to monitor these developments.


For additional information with respect to this Tax Alert, please contact the following:

Ernst & Young Belastingadviseurs LLP, Rotterdam

Ernst & Young Belastingadviseurs LLP, Amsterdam

Ernst & Young LLP (United States), Global Tax Desk Network, New York

Ernst & Young LLP (United States), San Jose

Ernst & Young LLP (United States), Washington, DC



  1. See EY Global Tax Alert, OECD’s Inclusive Framework releases BEPS 2.0 documents and agrees to continue work with target of conclusion by mid-2021, dated 13 October 2020.

  2. See EY Global Tax Alert, OECD releases BEPS 2.0 Pillar One Blueprint and invites public comments, dated 19 October 2020.

  3. See EY Global Tax Alert, OECD releases BEPS 2.0 Pillar Two Blueprint and invites public comments, dated 19 October 2020.

  4. See EY Global Tax Alert, OECD Inclusive Framework political leaders promote global consensus following OECD’s public consultation on Pillar One and Two Blueprints, dated 1 February 2021.

  5. See EY Global Tax Alert, OECD releases guidance on transfer pricing implications of COVID-19 pandemic, dated 23 December 2020.

  6. See EY Global Tax Alert, OECD Secretariat issues updated guidance on tax treaties and the impact of COVID-19 pandemic, dated 27 January 2021.

  7. See EY Global Tax Alert, OECD releases new transparency framework for Action 5 for 2021 through 2025, dated 26 February 2021.

  8. See EY Global Tax Alert, OECD releases Consultation Document on 2020 review of BEPS Action 14, dated 23 November 2020.

  9. See EY Global Tax Alert, OECD releases 2019 mutual agreement procedure statistics and 2019 mutual agreement procedure awards, dated 24 November 2020.

  10. See EY Global Tax Alert, OECD Forum on Tax Administration releases new handbook for International Compliance Assurance Programme (ICAP), dated 24 February 2021.


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