On 22 February 2022, the OECD published the comments on a consultation document regarding the draft model rules for nexus and revenue sourcing under Pillar One “Amount A”. The public comments shall assist an inclusive framework member with the formulation of the relevant rules.
The comments are available here.
In addition, the public comments on the draft model rules for tax base determination under Pillar One “Amount A” are also available on the OECD websites from 8 March 2022.
Moreover, on 14 March 2022, OECD published its long-awaited Commentary to Global Anti-Base Erosion Rules (GloBE). The Commentary is accompanied by illustrative examples.
As the next step, the OECD/G20 Inclusive Framework on BEPS will develop an Implementation Framework to support tax authorities in the implementation and administration of the GloBE Rules. As the first step in this process, the Inclusive Framework opens a public consultation to collect input from stakeholders on the matters that need to be addressed as part of the Implementation Framework. The public comments are invited by 11 April 2022 at the latest; a public consultation meeting will be held at the end of April 2022.
EU: Implementation of Pillar II has been postponed by a year
A proposed directive to implement in the EU the Pillar Two global minimum tax rules published by the OECD/G20 Inclusive Framework on BEPS was among the topics discussed at the 15 March 2022 meeting of the Council of the EU in its Economic and Financial Affairs configuration (ECOFIN). Finance ministers of the 27 EU member states were unable to agree unanimously on this occasion on the compromise text of the draft directive (prepared by the French presidency) to implement Pillar Two and a further meeting has been scheduled for 5 April 2022. The compromise text is the first formal indication that the EU timetable for implementation is slipping by one year (i.e. by the end of 2023 and 2024 for UTPR rules).
Such a deferral would, however, allow further time to consider the technical and other complexities raised by the Pillar Two model rules. As noted above, the OECD’s long-awaited guidance together with a separate annex of examples runs to more than 270 pages, which is a factual indication of the scale of introducing a global tax regime for the first time.
The Commentary and illustrative examples are currently subject to reviews and comments from the public. More information will follow.