The Organisation for Economic Cooperation (OECD) has announced a major reform of the international tax system has been finalised between 136 countries and jurisdictions, which will see multinationals be subject to a minimum 15% tax rate from 2023.
The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) agreement is based on the OECD's two-pillar approach that aims to ensure multinationals pay their fair share of tax in the countries they operate in. Out of 140 members of the OECD/G20 Inclusive Framework on BEPS, 136 agreed to introduce the new tax system.
The two-pillar approach is one of nexus and profit allocation and another of ensuring a minimum level of taxation of at least 15%.
Under pillar one, multinationals with global sales above