October 7, 2022
Report on recent US international tax developments – 7 October 2022
The Organisation for Economic Co-operation and Development (OECD) released several BEPS 2.0 documents at its 14th plenary meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 6 October, including a new consultation document on Pillar One. The consultation document, Progress Report on the Administrative and Tax Certainty Aspects of Amount A of Pillar One, includes “rules on the administration of the new taxing right, including the tax certainty-related provisions,” with procedures for in-scope multinationals to comply with the rules. The consultation period on the discussion draft ends on 11 November 2022. The first progress report on Amount A was released in July 2022.
OECD Secretary-General Mathias Cormann this week was quoted as saying that the organization still hopes to finalize the Multilateral Convention to implement Pillar One by mid-2023, with the goal of entry into force in 2024.
On the same day, the OECD also released a report on Pillar Two, Tax Incentives and the Global Minimum Corporate Tax. The report addresses the current use of tax incentives in developed and developing countries in the context of the Global Anti-Base Erosion (GloBE) Rules and “shows how they may impact different types of tax incentives differently.” To the extent that a country’s tax incentives push a multinational’s effective tax rate in a jurisdiction below the proposed 15% minimum rate, the multinational potentially would be subject to the top-up taxes under the proposed Pillar Two GloBE rules. The OECD report provides policy considerations for countries as they prepare for implementation of Pillar Two.
Also released was a Roadmap on Developing Countries and International Taxation and a Progress Report on the Tax Inspectors Without Borders initiative.
An OECD official this week was quoted as saying that amendments to the crypto-asset reporting framework (CARF) and common reporting standard (CRS) will be released on 10 October with considerable changes reflecting comments the organization received. The CARF and CRS will be provided to G20 Finance Ministers at their 12-14 October meeting in Washington, DC.
The OECD on 22 March 2022 published a Public Consultation Document which proposed new and amended reporting requirements covering reporting of crypto-assets and e-money as well as containing broader revisions to the existing CRS.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United States), International Tax and Transaction Services, Washington, DC