OECD Provides Additional Detail On Pillar One Proposal In Update On International Tax Reform – Seeking Consensus-Based Solution In 2020

In this Update

• The OECD has been working on a two-pillar approach to international tax reform: (a) Pillar One – which would allocate additional taxing rights to market jurisdictions (for example, by creating a new nexus test for establishing source country taxing rights, which diverges from the traditional "permanent establishment" concept), and (b) Pillar Two – which would introduce a global minimum tax and certain other measures to prevent the shifting of profits to low-tax jurisdictions. These proposals are expected to have a significant impact on multinationals, particularly those in digital-oriented and intangible-intensive sectors. Osler's summary of global efforts towards international tax reform are set out in prior Updates.