Response to the OECD’s public consultation concerning the Reports on the Pillar One and Pillar Two Blueprints
Chiomenti, Cuatrecasas and Macfarlanes have delivered a joint document answering to the OECD’s latest public consultation relating to the Reports on Pillar One and Two Blueprints.
In May 2019 the OECD/G20 agreed upon a Programme of Work in order to address the tax challenges of the digitalisation of the economy. In this context, it was provided a new framework in relation to the reallocation of taxing rights upon profit and the nexus (Pillar One), as well as rules that would allow jurisdictions to “tax back” the MNE group where other jurisdictions in which the group operates have not exercised their primary taxing rights or applied low levels of effective taxation (Pillar Two).
On 12 October 2020, the OECD released the Report on the Pillar One Blueprint and the Report on the Pillar Two Blueprint putting forward key policy features, principles and parameters of both Pillars, and identifying remaining technical and administrative issues.
In order to reach a consensus solution among Countries to Pillar One and Two issues, the OECD launched a consultation on the Reports above in relation to which Chiomenti, Cuatrecasas and Macfarlanes submitted their comments.