The G20 has endorsed the OECD's work programme consisting of the two-pillar approach which was the subject of Tanja Velling's recent post.  The G20’s communiqué shows that there is political support at the highest level for this project and it is full steam ahead to achieve consensus by the end of 2020.

The 11 June OECD Tax Talks webinar gave an update on the recent report to the G20 (June 2019) on the activities and achievements in the OECD’s international tax agenda. The focus of the webinar was mostly on the work programme for addressing the tax challenges arising from digitalisation.

Pascal Saint-Amans set out the next steps for this project.  There will be another public consultation in autumn 2019 with the hope of a unified approach by the end of 2019. There is a G20 Finance Ministers meeting on 17 October 2019 and an Inclusive Framework meeting at the end of January 2020. The G20 summit in Saudi Arabia in November 2020 will then be an important milestone on the journey to deliver the final piece by the end of 2020.

There are a lot of technical issues to be explored and resolved to bring about political agreement on Pillar One (revised nexus and profit allocation rules) and Pillar Two (the global anti-base erosion proposal).  In order to ensure that economic analysis informs the debate, there will be impact assessments carried out which will look at how the different proposals will affect the economy more broadly by influencing the behaviour of taxpayers and governments, in addition to assessing the level and distribution of tax revenues across jurisdictions.  

Delivering impact assessments will be challenging given the short time frame, the lack of available data and with the scope of the proposals continuing to evolve! Nevertheless, the OECD plans to produce an intermediate impact assessment report by October/November 2019 and a final impact assessment report by the end of December 2019.  There will then be ongoing impact analysis through until the end of 2020.  

It will be interesting to see from these impact assessments who will be the winners and losers – and whether those losers are still comfortable signing up to new tax rules!