Barbados has joined the two-pillar plan to reform the international taxation rules, bringing the total number of jurisdictions participating in the agreement to 133.

On 12 August Barbados agreed to the Statement, released on 1 July 2021, which establishes a new proposal for international tax reform – the two pillar plan.

Pillar One aims to ensure a fairer distribution of profits and taxing rights among countries with respect to the largest MNEs. It would re-allocate some taxing rights over MNEs from their home countries to the markets where they have business activities and earn profits, regardless of whether firms have a physical presence there.

Pillar Two seeks to put a floor on competition over corporate income tax, through the introduction of a global minimum corporate tax rate that countries can use to protect their tax bases.

The two-pillar solution contains a number of points on which members of the OECD/G20 Inclusive Framework on BEPS must still agree details. The deal will be finalised in October 2021, complete with an implementation plan to develop model legislation, guidance and a multilateral treaty in 2022, with implementation from 2023.