Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Acknowledged
Since 2013, the Organisation for Economic Co-operation and Development (OECD) and the G20 group have...
Conclusion
Since 2013, the Organisation for Economic Co-operation and Development (OECD) and the G20 group have worked together under the ‘Base Erosion and Profit Shifting’ project, and subsequently with around 140 countries and tax jurisdictions under the ‘Inclusive Framework on Base Erosion and Profit Shifting’, to reform international tax rules.21 These reforms consist of two ‘pillars’: • Pillar One will reallocate the taxing rights over the largest and most profitable multinational business groups from their home countries to the tax jurisdictions where their customers and users are located. • Pillar Two introduces a global minimum corporate tax rate.22 Differences between the Digital Services Tax and Pillar One of the reforms
Government Response Summary
The government's response describes Amount A and Amount B of Pillar One of the OECD reforms.
Government Response
Acknowledged
HM Government
Acknowledged
3.2 Amount A of Pillar One reallocates taxing rights over 25% of profits in excess of a 10% profit margin of multinational businesses with global revenue greater than €20 billion, from the jurisdictions in which valuable activities are undertaken to the jurisdictions where customers are located. Amount B of Pillar One seeks to simplify and streamline the application of the arm’s length principle to baseline marketing and distribution activities with a view to 14