On June 2, the Organization for Economic Cooperation and Development (OECD) announced that more than 100 countries have approved the introduction of an international tax system for large corporations. According to the plan, the minimum single tax rate will be 15%. For the system to work, countries must pass laws.
The reform is based on two "pillars" - documents released by the OECD last fall:
• Pillar 1 - redistribution of rights to tax excess profits of the largest international groups of companies (MGK) in favor of the countries of sale;
The Pillar 1 concept is that a portion of MGK's profits will be subject to income tax in the countries where users / consumers are located, regardless of whether MGK has any presence in such countries. only those MGKs whose global turnover exceeds 20 billion euros will distribute excess profits to the countries of sale (it is possible that this threshold will subsequently be reduced to 10 billion euros) - previously the threshold was planned to be set at 750 million euros.
• Pillar 2 - guarantees of taxation of MGK's profits at least at the minimum level.
The Pillar 2 concept is that if the effective tax rate in the individual jurisdictions in which the MGK is represented is less than the minimum tax, then an additional tax will arise to compensate for this difference. In general, this additional tax will be paid at the level of the ultimate parent company. If the country in which the recipient is located is the adjusted nominal tax rate below the minimum, an additional tax will be charged to compensate for this difference. Perhaps the most important part of the OECD's Pillar 2 announcement is the setting of specific minimum tax rates. In particular, for rule IIR, the minimum tax rate will be 15%. In fact, this means that in all jurisdictions in which the MGK is represented, the effective tax rate must be at least 15%.
The OECD estimates that due to tax shortfalls, governments annually lose from $ 100 billion to $ 240 billion a year. The OECD suggests that the technical study of the documents should be completed in October 2021, while the implementation plan should be implemented by 2023. According to officials, the new rules will help states effectively cope with the consequences of the coronavirus.
