A regional perspective on global tax reform

In October 2021, after years of negotiations, the OECD announced that 136 countries had reached agreement on a sweeping overhaul of the international tax system that will impose a 15% minimum tax rate on some multinational enterprises (MNEs) and reallocate more than USD 125 billion of profits from approximately 100 of the world’s largest and most profitable MNEs to countries worldwide. The OECD released an eight-page statement that updates its 1 July blueprint and includes an annex that provides important details regarding implementation of the agreement. The statement follows the outline of the original plan: a two-pronged framework, with Pillar One addressing taxing rights and distribution of profits and Pillar Two imposing a global minimum tax. This report from BDO reflects on some of the implementation challenges both globally and regionally.

The report is in the form of a comparative review of the attitudes of various jurisdictions to the Pillar One and Pillar Two proposals, based on responses to questions asked of BDO Tax partners across the globe. It provides insights into the attitudes to the global tax agreement that can be expected to influence how the deal is implemented (and perhaps even evolves) in the coming years. We will continue to monitor developments and take a further look at how the proposals are being implemented in practice.

Readers of the BDO report can also refer to BDO’s interactive Taxation of the Digital Economy tool for an update on the range of unilateral measures – including digital services taxes – that have been introduced around the world.