Pillar One

Pillar One seeks to create a new taxing right for market jurisdictions on “Amount A”. This new taxing right is independent of physical presence and will be determined based on a formulaic approach. It will only apply to MNE groups with both a global turnover in excess of EUR 20 billion and a pre-tax profit margin above 10%. The scope may be broadened in the future by decreasing the turnover threshold to EUR 10 billion. Pillar One also entails simplifications to the transfer pricing approach to “baseline” marketing and distribution functions, as well as mandatory and binding dispute prevention and resolution mechanisms to mitigate the risk of multiple taxation.

Pillar Two

Pillar Two seeks to enforce a global minimum corporate income tax at an effective rate of 15%, calculated on a jurisdiction-per-jurisdiction basis. It will apply to MNEs that meet the EUR 750 million threshold as determined under Country-by-Country rules, but a lower threshold may be applied at the discretion of implementing countries. Pillar Two consists in a mix of measures giving taxing rights to the jurisdiction of the group’s ultimate parent and to the jurisdictions of entities making intragroup payments to low-taxed group companies or jurisdictions.

How can we help?

Our team can support you in:

  • Modelling the impact of the new rules and identifying red flags
  • Adapting your tax compliance process
  • Assessing the opportunities for restructuring
  • Going through dispute prevention and resolution procedures to prevent double taxation
News - 23 December 2021 - Global

European Commission publishes legislative tax proposals

The legislative tax proposals build upon the international negotiations on the misuse of shell entities and reform plan of Energy Taxation Directive
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International Tax Flash: OECD's Pillar Two model rules
News - 21 December 2021 - Global

OECD publishes Pillar Two model rules on IIR and UTPR

The OECD released its Pillar Two model rules, for participant jurisdictions to implement most of the Pillar Two rules.
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News - 11 October 2021 - Global

Agreement on Pillar One and Pillar Two global tax reform

On 8 October 2021, 136 out of 140 members of the OECD/G20 Inclusive Framework officially agreed on...
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Big step towards agreement on Pillar One and Pillar Two
News - 02 July 2021 - Global

Big step towards agreement on Pillar One and Pillar Two

On 1 July 2021, 130 countries committed to reaching detailed technical agreements.
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OECD-pillar-one-pillar-two-virtual-meeting
News - 20 January 2021 - Global

OECD virtual meeting on Pillar One and Pillar Two

In this article, our Digital Economy Taxation team shares key takeaways from the two panel sessions dedicated to the Pillar Two Blueprint.
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News - 17 December 2020 - Global

Comments on the OECD’s Pillar 1 and Pillar 2 reports

OECD/G20 Inclusive Framework launched a public consultation document in relation to the released Reports on the Pillar One and Pillar Two Blueprints
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News - 13 October 2020 - Global

Pillar Two proposal for global minimum effective taxation

OECD released for public consultation updated reports on its two-pillar proposal to address the tax challenges of the digitalisation of the economy.
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News - 13 October 2020 - Global

Pillar One blueprint on new taxing right for market jurisdictions

OECD released for public consultation updated reports on its two-pillar proposal to address the tax challenges of the digitalisation of the economy.
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News - 17 February 2020 - Global

Update Economic Analysis and Impact Assessment Pillar 1/Pillar 2

On 13 February 2020, experts from the OECD’s Centre for Tax Policy and Administration and Economics Department provided an update on the preliminary economic...
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News - 11 November 2019 - Global

OECD’s plans for global minimum taxation: the next steps

Multinationals have now the opportunity to help shape the OECD's proposals for a global minimum taxation in a consultation open until 2 December 2019.
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