IOTA and the Organisation for Economic Co-operation and Development (OECD) successfully co-hosted a regional consultation addressing the tax challenges of digitalisation on 23rd September 2021. This consultation followed the “Statement on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy” issued recently by the Inclusive Framework on BEPS.
The July 2021 Statement represents a historic agreement providing for fundamental tax reforms that will update key elements of the century-old international tax system and help countries protect their tax bases. The efforts of the Inclusive Framework now aim at finalising the outstanding elements of the Statement and adopting a detailed implementation plan by October 2021. As these matters are of critical importance to the Inclusive Framework members and the international tax agenda, engagement with all relevant stakeholders to provide information and gather input and feedback is crucial.
Welcome remarks by the co-chairs, Eugenijus Soldatkovas (Manager of IOTA Work Programme, IOTA) and Ben Dickinson (Head of Global Relations and Development, Centre for Tax Policy and Administration, OECD) set the floor for the two-hour virtual meeting, which brought together government officials from IOTA members, as well as members and non-members of the Inclusive Framework from the Eurasia region.
The OECD Secretariat provided participants with an update on progress on Pillar One (new nexus and profit allocation rules) and on Pillar Two (a global minimum tax), including on finalising outstanding elements of the agreed Statement from July 2021 and on implementation plans. They have also provided a short overview of the estimated revenue impacts of the two-pillar agreement.
Participants took the opportunity to ask questions and seek clarification on the proposals. Clarification was provided on several issues including the proposed timeline for implementation of Pillars 1 and 2. The OECD and IOTA confirmed that there will be further consultation and updates as the work progresses. The next milestone is the meeting of the Inclusive Framework on 8th October 2021 and an update on the outcomes of that meeting will be given at the 7th IOTA/OECD Regional Meeting on BEPS for Eurasian countries, which is scheduled to take place in November.