OECD sees global corporate tax overhaul on track for 2024

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The Secretary General of the Organization for Economic Co-operation and Development (OECD), Mathias Cormann, speaks during a press release after the opening ceremony of the OECD meeting at the Itamaraty Palace in Brasilia, Brazil , June 21, 2022. REUTERS / Adriano Machado

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PARIS, July 11 (Reuters) – The biggest overhaul of cross-border tax rules in a generation is now set to come into force in 2024, the Organization for Economic Co-operation and Development said in an update on Monday. the project for G20 finance ministers. .

The overhaul, led by the OECD and agreed to by nearly 140 countries last year, aims to better take into account the emergence of large digital companies, such as Apple (AAPL.O) and Amazon ( AMZN.O) that can register profits in low-tax countries.

The first pillar of the two-pronged reform aims to reallocate 25% of the profits of the world’s largest multinationals to taxation in the countries where their customers are located, regardless of the physical location of the companies. The second pillar aims to set an overall minimum corporate tax rate of 15%.

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Both pillars were originally due to be implemented next year, although this was always seen as very ambitious given the difficulty of coming to terms with complex changes to many countries’ tax laws.

“We will continue to work as quickly as possible to finalize this work, but we will also take all the time necessary to put the rules in place,” OECD Secretary-General Mathias Cormann said in a statement.

“These rules will shape our international tax arrangements for decades to come,” he added.

The OECD said in a report to G20 finance ministers this week in Bali that the new timetable for the first pillar sets a firm deadline of mid-2023 for approval of the multilateral legal framework underpinning it to that it can enter into force in 2024.

In the meantime, he said most countries are considering legislation to adopt the global minimum tax rate so that it also comes into force in 2024.

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Reporting by Leigh Thomas Editing by Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.

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