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The G7 Tax Plan: OECD rocket fuel or just another step on a long road?

  • Switzerland

    24-06-2021

    In the past couple of months, the OECD have seen their hard graft over long years to formulate their international tax reform blueprints for “Pillar 1” economic nexus taxation and a “Pillar 2” global minimum tax rebranded as first Joe Biden’s international tax reform proposals and now as the G7 tax plan.

    The G7 tax plan has in particular received a very high level of publicity, not necessarily commensurate with the brief, high-level statement issued by the G7 finance ministers last week. While the G7 statement, like Biden’s earlier proposals (and clearly based on Biden’s proposals), suggests some differences to the OECD proposals published at the end of 2020, it basically reflects the position reached by the OECD. What is significant is the public commitment, particularly from the US, to progressing the OECD reforms, which frankly had stalled under the previous US administration.

    So what is the roadmap from here, what tax changes can multinational businesses expect and when? Set out below is a brief overview of the G7 and Biden tax proposals and their interaction with the OECD proposals, a “best guess” timetable for implementation of the reforms (if political momentum can be expanded globally and maintained) and comment from our international tax experts on the potential implications of these reforms.

    What is clear is that despite the strong political statements from the G7, there is still likely to be a long road to travel to finalize the design of these reforms, obtain broad international consensus and then implement such reforms at a domestic level globally.

    Read more here.

     

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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