OECD: Call for public comments for a Unified Approach under Pillar One
On October 9, the Organisation for Economic Co-operation and Development announced the publication of a proposal “to advance international negotiations to ensure large and highly profitable multinational enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits.” The OECD is seeking public comments on the proposal, titled Secretariat Proposal for a “Unified Approach” under Pillar One.
Pillar One is one of two pillars into which the OECD’s Task Force on the Digital Economy (TFDE) has grouped proposals related to the tax challenges of the digitalisation of the economy. Pillar One is a proposal that suggests new nexus rules (i.e. where tax will be paid) and new profit allocation rules (i.e. what portion of a multinational group’s profits will be taxable). The OECD is accepting public comments until noon Paris time, 12 November 2019.
Pillar two is expected to be discussed in a public consultation later this year and will focus on a minimum corporate tax on multinationals profits.
Vistra will soon publish more detailed information about the recent OECD proposal on its International Expansion blog.