Public Applauds OECD on Two-Pillar Solution's Progress
Public comments received on the Progress Report on Amount A of Pillar One
A number of the more than 70 public comments the Organisation for Economic Co-operation and Development (OECD) released on 25 August 2022 were positive following the July publication of its Progress Report on Amount A of Pillar One. The OECD/G20 Inclusive Framework on BEPS had requested the public's input on the progress report to help in crafting the final plan to create a "Two-Pillar Solution" to address the tax challenges stemming from the digitalization of the worldwide economy.
Amount A of Pillar One is intended to reallocate taxable profits of large multinationals, mitigate the double taxation of profits, and avoid a harmful tax and trade war, the Tax Foundation, a US think tank, acknowledged in its submission.
American multinational tech company Microsoft also registered its appreciation of the progress the OECD has made thus far. "While we look forward to learning more about Amount A tax administration, the treatment of withholding taxes, and critical tax certainty issues, the OECD Secretariat should be commended for attempting to develop a unified net basis taxation approach for consideration by the OECD Inclusive Framework," it said.
International audit firm KPMG encouraged the OECD to continue seeking input as it develops the remaining parts of Amount A, Amount B, tax certainty for issues related to Amount A and the definition of unilateral measures — all of which are integral to Pillar One.
Most submissions emphasized the practicality, clarity and certainty of the process.
"The Pillar One rules must strike the right balance between accuracy and practicality," BDO, a tax and financial advisory firm, said. "They must be administrable by MNE taxpayers, and the results must be verifiable by the tax authorities."
The public consultation meeting on Amount A of Pillar One is set to be held on 12 September 2022. It will provide a platform for the OECD to engage with its external stakeholders and consider their input on the ongoing work.
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