Global tax agreement progresses
Terms of agreement for the global tax initiative were made on Thursday (21 October) between the UK, Austria, France, Italy, Spain and the US for the two-pillar package of reforms to the international tax framework to be implemented in 2023.
The intitiative, which was agreed to on 8 October between 136 countries of the OECD-G20 Inclusive Framework represents 94 per cent of the world’s GDP.
These reforms will provide for a tax framework that is fairer, more stable and better equipped to meet the needs of a 21st-century global economy.
The UK, Austria, France, Italy, Spain and the US announced on Thursday (21 October) the terms of an agreement on the transition from existing digital services taxes to the new multilateral solution, and have committed to continuing discussions on this matter through constructive dialogue.
This compromise represents a pragmatic solution that helps ensure that the named countries can focus their collective efforts on the successful implementation of the OECD/G20 Inclusive Framework’s agreement on a new multilateral tax regime, and allows for the termination of trade measures adopted in response to digital services taxes.
Overall, this political agreement carefully balances the perspectives of several countries, and is yet further demonstration of their commitment to working together to reach consensus, and to deliver far-reaching multilateral reforms that help support their national economies and public finances.