Recommendation 12

Legislative decisions, implementation decisions and the operation of compliance regimes for Pillars One and Two will be carried out in line with agreed conventions and frameworks.34 In July 2022 the OECD announced that the multilateral convention which will implement Pillar One globally will be open for jurisdictions to sign in mid- 2023, with the aim of the Pillar One reforms coming into force in 2024. This represents a slippage of one year since the initial announcement in October 2021, although HM Treasury said it still expects the timetable to be met.35 It has proved easier for countries to agree on the destination of reallocated profits than where they should move from.36 HM Treasury considered that the main challenge would be to ensure that the key signatories to the Convention actually implemented it.37 Most of all, the cooperation of the United States is crucial, given its opposition to existing Digital Services Taxes.38 29 Qq 6,7 30 Qq 55, 56 31 Q 28 32 HM Treasury, Autumn Statement 2022, 17 November 2022. 33 Qq 60–62 34 Qq 56–58 35 Qq 42, 43; C&AG’s Report, para 1.4, 1.12, 1.14 36 Q 28 37 Qq 18, 59 38 Qq 82, 100–102 12 The Digital Services Tax 3 Future challenges in taxing digital businesses Consequences of delay in introducing the OECD reforms