As regards timing, the main takeaways from this Statement are: 

  1. Amount A: The Multilateral Convention (MLC) was not yet published but should be finalized by the end of 2023 with the aim of enabling its entry into force in 2025.
  2. DSTs: The standstill commitment for Digital Service Taxes (DSTs) is extended until 31 December 2024, but subject to certain conditions regarding jurisdictions signing the MLC.
  3. Amount B: The work should be completed by the end of 2023 and a public consultation will be launched next week until 1 September 2023. The main elements of the final report on Amount B will be incorporated into the OECD Transfer Pricing (TP) Guidelines by January 2024.


In December 2021 the members of the Inclusive Framework reached a political agreement on reforms to the international tax system under Pillar One (reallocation of certain taxing rights) and Pillar Two (global minimum taxation). 

The main element of Pillar One is the introduction of a new domestic taxing right in market jurisdictions (Amount A) with respect to a defined portion of the residual profits of MNEs that meet certain revenue and profitability thresholds and that have a defined nexus to such market jurisdictions. To implement Amount A and allow jurisdictions to exercise this new taxing right, the OECD is working on an MLC and an Explanatory Statement. The MLC will include provisions on the scope and operation of Amount A, the mechanisms for relieving double taxation, a process for ensuring tax certainty, the conditions for the removal of existing DSTs and relevant similar measures, and the commitment as of the same time not to enact new ones (see our Tax Flashes of 10 October 2021 and 21 December 2022). 

Another important element of Pillar One is Amount B, which provides a framework for the simplified and streamlined application of the arm’s length principle to in-country baseline marketing and distribution activities with a particular focus on the needs of low-capacity countries.

The Outcome Statement

The Outcome Statement foresees a package comprising four parts: 

  1. Text of an MLC for Pillar One’s Amount A;
  2. Proposed framework for Pillar One’s Amount B;
  3. The Pillar Two Subject to Tax Rule (STTR) and its implementation framework; and
  4. A call for the preparation of an action plan to support a swift and coordinated implementation of the measures of the two‐pillar global tax reform. 

We will only further elaborate on parts (i) and (ii) below. The agreed documentation relating to the Pillar Two STTR will be released next week. We will inform you separately on this topic once it is published. 

MLC for Amount A and DSTs

The text of the MLC is not publicly available yet, but a draft version has already been circulated among members of the Inclusive Framework. The Statement contemplates that the convention will be opened for signing in the second half of 2023 and a signing ceremony will be organised by the end of 2023, with the objective of enabling its entry into force in 2025. 

In addition, members of the Inclusive Framework agree to refrain from imposing newly enacted DSTs or relevant similar measures, as defined in the MLC, on any company between 1 January 2024 and the earlier of 31 December 2024, or the entry into force of the MLC, with the possibility to extend this commitment. This agreement is subject to at least 30 jurisdictions, accounting for at least 60% of the UPEs of in-scope MNEs, signing the MLC before the end of 2023.

Framework for Amount B

To ensure the appropriateness of the scope and pricing framework of Amount B, the Statements notes that further work will be undertaken on the following aspects of Amount B:

  1.  Ensuring an appropriate balance between a quantitative and qualitative approach in identifying baseline distribution activities; and
  2. The appropriateness of: (a) the pricing framework, also considering the final agreement on scope; (b) the application of the framework to the wholesale distribution of digital goods; (c) country uplifts within geographic markets; and (d) the criteria to apply Amount B utilising a local database in certain jurisdictions. 

In addition, the Outcome Statement announces that input from stakeholders on the aforementioned elements will be sought until 1 September 2023 with the work to be completed by year end. Moreover, it notes that content from the final report on Amount B will be incorporated into the OECD TP Guidelines by January 2024. We understood from informal comments by the OECD that the updated scope of Amount B will be broader, which may allow more taxpayers to benefit from this simplification in line with our comments submitted in the previous consultation round on Amount B (see our consultation comments of 30 January 2023).  

What can taxpayers do? 

Our Pillar One team is available to support you in analysing and modelling the impact of the Pillar One rules on your group and exploring ways to legitimately mitigate increased taxation and complexity.

We will keep you informed about further developments. Should you have any question or need assistance in assessing the impact of the rules, please contact a member of our Pillar One team or your trusted Loyens & Loeff adviser.