Inclusive Framework on BEPS Targets Multilateral Convention Signature by End of June

On May 30, 2024, the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) concluded its 16th meeting, held in Paris from May 28 to May 30. The meeting saw participation from over 400 delegates representing 140 delegations, including 127 countries and jurisdictions and 13 observers.

Key Discussions and Outcomes

Over the three-day meeting, delegates engaged in discussions on various topics, including:

• BEPS Minimum Standards: Implementation and impact were reviewed, with a focus on expanding this impact through technical assistance and capacity building.
• Global Minimum Tax: The status and experiences of implementing this tax were assessed.
• Subject to Tax Rule: Plans were made for a signing ceremony scheduled for September 19, 2024, in Paris.
• Ongoing Tax Policy Work: Delegates discussed the role of tax in addressing inequality and reflected on the challenges and opportunities of the Inclusive Framework journey thus far.

Progress on Pillar One

The Inclusive Framework reported significant progress in finalizing the negotiations on Pillar One of the Two-Pillar Solution, aimed at addressing tax challenges arising from the digitalization of the economy. The final package includes:

• Multilateral Convention (MLC) for Amount A: This text is nearly complete.
• Framework for Amount B: This framework is also close to finalization.

Target for Multilateral Convention Signature

The goal is to finalize the agreement in time to open the MLC for signature by the end of June 2024. France and Brazil have expressed interest in hosting a signing ceremony as soon as practical after the MLC is opened for signature.

Other Key Topics Discussed

• Domestic Resource Mobilization Efforts
• Platform for Collaboration on Tax: Sessions included valuable contributions from the UN, IMF, and World Bank. Discussions highlighted that existing financing forms cover only about half the revenues needed to finance the sustainable development goals (SDGs). Taxes were emphasized as the largest and most stable revenue source for development.
• Importance of International Cooperation: Given the scale of financing required to meet the SDGs, generating revenues from additional sources and continued international cooperation is essential.

New Members and Future Reflections

• Since the last Plenary meeting in July 2023, four new members (Kuwait, the Philippines, Fiji, and Moldova) have joined the Inclusive Framework.
• Part of the meeting involved reflecting on the working methods within the Inclusive Framework, with an ongoing commitment to improving collaboration and effectiveness.

Source/recommended read: Statement by the Co-Chairs of the OECD/G20 Inclusive Framework on BEPS - OECD