PwC responds to a series of rolling public consultations on Pillar One Amount A rules
29 August, 2022
As part of the global tax reform project, the OECD continues to develop rules to achieve a global minimum effective tax rate (‘Pillar Two’). This is coupled with rules to reallocate the taxing rights over profits of large multinational enterprises.
On the latter effort to reallocate taxing rights to market jurisdictions, which is commonly referred to as ‘Pillar One’ of the project, the OECD is issuing draft rules in constituent parts. By doing so, the OECD can run real-time public consultations on specific elements of the rules.
The OECD is ultimately working to amalgamate all rules in one set of model rules, similar to the Pillar Two rules.
To date, several chapters of the model rules have been published, along with a progress report issued in July 2022. Public consultations have concluded on the following chapters:
Revenue sourcing and nexus
Tax base determinations
General scope rules
Extractives exclusion
Regulated financial services exclusion
Tax certainty
Progress report
PwC has responded to each of these requests for commentary, and our response to each chapter is linked below in addition to a Tax Policy Alert, which briefly explains the key elements of the chapter.
Tax Policy Alerts |
Response to public consultation |
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Regulated financial services exclusion |
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Further chapters will be released in the weeks and months ahead, and PwC will continue to respond to requests for feedback.
Although it’s not always clear how the various sets of rules knit together as a whole, the process offers stakeholders a chance to consider how elements of the rules will impact affected businesses and to feed these considerations back to the OECD. As further chapters are released, the interaction between the sections becomes clearer.
How we can help you
Pillar One is expected to apply only to the largest and most profitable multinational businesses (see the general scope rules tax policy alert for more details on the scoping rules). If your business is in scope, you will need to know how and when these rules will impact the tax function.
PwC can help you plan for Pillar One in several ways:
Discussing what the rules mean and helping you identify key risk areas that will need input from specialist teams;
Keeping you abreast of the latest related international developments that will have a bearing on the final set of rules;
Applying the rules to your business model to identify any change in the taxing rights applicable to your organisation’s profits and how that impacts tax costs;
Identifying what data you will need from the finance function to quantify the impact and manage the additional compliance burden that will follow; and
Discussing cross-border issues like dispute prevention and resolution.
Contact us today
As the Pillar One model rules continue to develop and move closer to finalisation, our team of Pillar One experts, coupled with our global tax policy network, is ready to help you make sense of these changes and plan accordingly. Contact us today.
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