The Organisation for Economic Co-operations and Development (OECD) is delaying the implementation of Pillar One of the landmark agreement on international tax reform.
A new Progress Report on Pillar One, which includes “a comprehensive draft of the technical model rules to implement a new taxing right that will allow market jurisdictions to tax profits from some of the largest multinational enterprises,” will be open to stakeholder comment through August 19, 2022, OECD said in a statement.
That report notes that the plan is to finalize Pillar One by mid-2023, with the more than 135 countries and jurisdictions that are a part of the agreement able to put the framework into operation in 2024.
The revised timeline “is designed to allow greater engagement with citizens, businesses, and parliamentary bodies which will ultimately have to ratify the agreement,” OECD said.
The Department of the Treasury welcomed the delay.
“Treasury welcomes the additional year agreed to at the OECD to allow further time for negotiations among governments and consultations with stakeholders on implementation of the Pillar One agreement, which will make the international tax system more stable and fair for businesses and workers in the United States and globally,” a spokesperson for the agency said. “Tremendous progress has been made, and additional time will ensure we all get this historic agreement right.”
OECD also noted that technical work under Pillar Two, which will introduce the 15 percent global minimum corporate tax rate, “is largely complete.” The implementation framework is expected to be released later this year.