Almost two years ago, in its inclusive framework with G20 nations, the Organisation for Economic Cooperation and Development (“OECD”) proposed a two-pillar, consensus-based solution, to tackle two of the most prominent tax issues relating to – (i) taxing the digital economy and (ii) base erosion due to shifting of profits to low or no tax jurisdictions.
The previous discussions on these issues slowed down much like economic growth and everything else, as the world grappled with the challenges posed by COVID-19. Moreover, the erstwhile US government appeared reluctant to the OECD proposal, especially on Pillar 1. However, the Biden-led government demonstrated its commitment to the OECD proposal, set out an alternative proposal for Pillar 1, and expressed support to minimum global tax rate.
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