On 8th October, 2021, the OECD/G20 Inclusive Framework on BEPS
issued a "Statement on a Two Pillar Solution to Address
the Tax Challenges Arising from the Digitisation of the
Economy" 1.The Statement, termed as
"ground-breaking" and "landmark"2,
has been agreed by 136 countries representing 90% of the global
GDP3. The broad contours of the solutions identified in
the October 8th Statement identical to the previous Statement
issued on 1st July, with certain areas made clearer such as the
below4:
- Under Pillar 1, Amount A has been agreed to be
equivalent of 25% of residual profits i.e. profits which is in
excess of 10% of revenue.
- A clear pronouncement that Multilateral Convention (MLC) will
require all parties to "remove all Digital Services Taxes
and other similar relevant measures with respect to all companies
and to commit not to introduce such measures in the
future".
