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October 14, 2021

G20 Finance Ministers endorse 8 October BEPS 2.0 statement and call for swift implementation to secure entry into effect in 2023

Executive summary

On 13 October 2021, the G201 Finance Ministers and Central Bank Governors met in Washington. The communiqué issued at the conclusion of the meeting includes the G20 Finance Ministers’ endorsement of the political agreement set out in the statement and accompanying implementation plan issued by the OECD2/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 8 October 2021 on the two-pillar project to address the tax challenges of the digitalization of the economy. They also called on the Inclusive Framework to swiftly develop model rules and multilateral instruments with a view to ensuring that the new rules come into effect at a global level in 2023.

Detailed discussion


On 8 October 2021, the OECD released a statement reflecting the agreement reached by 136 out of the 140 Inclusive Framework member jurisdictions on core design features of the two pillars of the BEPS 2.0 project (October Statement).3

OECD Secretary-General report

On 13 October 2021, the OECD Secretary-General delivered a tax report to the G20 Finance Ministers and Central Bank Governors providing an international tax update. The report addresses:

  • The October Statement, stating that this achievement will transform the international tax system by reallocating certain profits to market jurisdictions and by putting a floor on tax competition to ensure that at least a minimum amount of tax is paid.
  • Tax policy and climate change, stating that the OECD Secretary-General aims to create a multilateral platform similar to the OECD/G20 Inclusive Framework on BEPS for the improved measurement and assessment of emission reduction policies and will work on a detailed plan on how to move this forward rapidly. The report includes as an attachment a report by the OECD and the International Monetary Fund on tax policy and climate change.
  • Developing country matters, with the attachment of a report by the OECD on “Developing Countries and the OECD/G20 Inclusive Framework on BEPS” that covers the progress made by developing countries participating in the Inclusive Framework and possible areas where domestic resource mobilization efforts could be further supported.
  • Tax matters related to COVID-19, with the attachment of a new report by the OECD on “Tax and Fiscal Policy after the COVID-19 Crisis,” which follows the earlier reports published in April 2020 and April 2021 and discusses how countries can work toward ensuring that their tax and spending policies support inclusive and sustainable economic growth in the post-COVID 19 environment. The report aims to initiate discussion of tax policy design options that countries could consider fostering sustainable growth in the medium to long term.
  • The current status of the implementation of tax transparency and BEPS minimum standards. According to the report, the implementation of the Automatic Exchange of Financial Account Information in Tax Matters (AEOI) and Exchange of Information on Request (EOIR) standards is on track. Most of the jurisdictions have in place an international legal framework in accordance with the AEOI and 85% of the EOIR assessed jurisdictions have received a satisfactory overall rating. The report also includes a short progress overview on the four BEPS minimum standards contained in Action 5 (Harmful tax practices), Action 6 (Prevention of tax treaty abuse), Action13 (Country-by-country reporting) and Action 14 (Mutual agreement procedure).

G20 communiqué

On 13 October 2021, at the close of the G20 Finance Ministers and Central Bank Governors, a communiqué was issued endorsing the October Statement of the Inclusive Framework:

After the historic agreement reached in July on the key components of the two pillars on the reallocation of profits of multinational enterprises and an effective global minimum tax, we endorse the final political agreement as set out in the Statement on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy and in the Detailed Implementation Plan, released by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 8 October. This agreement will establish a more stable and fairer international tax system. We call on the OECD/G20 Inclusive Framework on BEPS to swiftly develop the model rules and multilateral instruments as indicated in and according to the timetable provided in the Detailed Implementation Plan, with a view to ensure that the new rules will come into effect at global level in 2023.

The communiqué welcomes the OECD report on “Tax and Fiscal Policies after the COVID-19 Crisis,” which assesses the emergency tax and fiscal policy measures introduced by countries in response to the COVID-19 pandemic. In addition, the communiqué notes the OECD report on “Developing Countries and the OECD/G20 Inclusive Framework on BEPS” and indicates the intention for further discussions, on a regular basis, of the recommendations included in the report.


The two-pillar project to address the tax challenges arising from the digitalization of the economy contemplates significant changes in the overall international tax architecture under which multinational businesses operate. The endorsement by the G20 Finance Ministers of the political agreement on key components of the two pillars and their call for swift action is intended to encourage jurisdictions to move quickly to implement the new rules through changes in their domestic law and through the negotiation, signature and ratification of the multilateral instruments necessary to adjust their treaty relationships.

However, there still is significant work to be done in the Inclusive Framework to develop the technical details and coordination of the new rules. Going forward, the implementation process for each of the pillars will need to be executed by countries around the world, which will create further complexity.

It is important for companies to follow these developments closely as they unfold in the coming months and to evaluate the potential impact of the proposed international tax changes on their businesses. In addition, looking ahead, companies will need to monitor activity in relevant countries related to the implementation of the agreed rules through changes in domestic tax law and bilateral or multilateral agreements.

Companies also should take note of global developments with respect to tax policy and climate change, including activity in the G20, OECD and European Union.


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

Ernst & Young Belastingadviseurs LLP, Rotterdam

Ernst & Young Belastingadviseurs LLP, Amsterdam

Ernst & Young Limited (New Zealand), Auckland

Ernst & Young Solutions LLP, Singapore

Ernst & Young LLP (United States), Detroit

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

Ernst & Young LLP (United States), New York

Ernst & Young LLP (United States), Global Tax Desk Network, San Diego

Ernst & Young LLP (United States), Seattle

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



  1. The G20 includes the European Union and 19 individual countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom (UK), and the United States (US).
  2. Organisation for Economic Co-operation and Development.
  3. See EY Global Tax Alert, OECD releases statement updating July conceptual agreement on BEPS 2.0 project, dated 11 October 2021.

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