Last Friday, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) announced that its 129 members have adopted a Programme of Work setting out a process for agreeing a new global consensus for taxing multinational enterprises (MNEs). The document, which calls for intensifying international discussions around two main pillars, was approved last week at a meeting of the Inclusive Framework. It will be presented by the OECD to the G20 Finance Ministers for endorsement on 8 and 9 of June in Japan.
This Programme of Work, which is a follow on from the consultation process undertaken earlier this year, sets out a roadmap which includes two pillars of work. The first pillar will focus on solutions for determining where a company should pay tax and on what basis as well as what portion of profits should be taxed where clients or users are located. The second pillar of work is intended to address remaining issues identified by the OECD/G20 BEPS initiative and explores the design of a minimum tax for MNEs.
The OECD said that there is a large amount of work to do to reach a consensus-based long-term solution, adding that they hope to reach a unified solution before the end of 2019 to ensure adequate time for completion of work during 2020.
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