The OECD’s two-pillar corporate tax reform plan is due to come into effect in 2023. Pillar one includes a rule to reallocate profits of the largest groups in the world to market jurisdictions. Pillar two consists of global anti-base erosion (GloBE) rules and the subject to tax rule (STTR). The GloBE rules impose a minimum corporate tax rate, to be effected by top-up taxes. The STTR allows jurisdictions to impose source taxation (for example, withholding taxes) on certain related party payments. Further detail is expected next month.
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The OECD’s two-pillar corporate tax reform plan is due to come into effect in 2023. Pillar one includes a rule to reallocate profits of the largest groups in the world to market jurisdictions. Pillar two consists of global anti-base erosion (GloBE) rules and the subject to tax rule (STTR). The GloBE rules impose a minimum corporate tax rate, to be effected by top-up taxes. The STTR allows jurisdictions to impose source taxation (for example, withholding taxes) on certain related party payments. Further detail is expected next month.
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