OECD Maintains ‘100% Commitment’ to Finalize Global Tax Pact, Reports Reuters

Global Tax Pact for Multinationals Shows Continued Commitment Despite Delays

PARIS – The head of tax at the Organisation for Economic Cooperation and Development (OECD) expressed confidence that nations remain dedicated to finalizing a global tax agreement targeting highly profitable multinational corporations, despite facing months of delays and hesitations from several major countries.

Officials from nearly 130 countries and jurisdictions failed to meet a mid-year deadline for completing the framework of an international treaty designed to redistribute taxing rights across borders, particularly focusing on large U.S. digital corporations. This has left the future of the agreement uncertain.

This treaty is part of a two-pillar corporate tax reform initiative agreed upon in 2021, which seeks to replace unilateral digital services taxes with revised regulations for allocating taxing rights among companies such as Google, Amazon, and Apple.

"There is 100% commitment among members to get it done," stated OECD tax director Manal Corwin during a press conference. She emphasized the importance of urgency, highlighting that achieving a resolution before the year ends is a priority.

However, Washington has indicated that countries like India, China, and Australia have yet to align with U.S. proposals regarding alternative methods for calculating transfer pricing.

In the meantime, many countries have started to implement the second pillar of the 2021 global tax agreement, which involves an agreed minimum corporate tax rate of 15%, or the introduction of an additional tax for large multinationals that derive profits from nations with lower tax rates.

Recently, a group of 19 countries either signed or pledged to endorse a treaty enabling developing nations to impose taxes on certain outbound intra-company payments that would otherwise come with minimal or no taxation, as announced by the OECD.