The OECD gave a report to G20 finance ministers in Bali this week, stating that the new Two-Pillar global tax reform (known as the GloBE rules – Global Anti-Base Erosion Model rules) will be in place to enter into force in 2024.

The 105 page report, presented to the G20 finance ministers and central bank governors on Monday 11 July, includes a comprehensive draft of the model rules to implement the right for markets to tax profits of the largest multinational firms (Pillar One). This first part of GloBE aims to reallocate 25% of the profits from the world’s largest enterprises to the countries where their clients are, regardless of the companies’ physical location. This draft is now subject to public consultation until mid-August.

Pillar Two aims to set the minimum global corporate tax rate at 15%, and the OECD reports that technical work is “largely complete”, with an implementation framework scheduled for release later this year.

The Two-Pillar plan for global tax reform received agreement from 135 countries and jurisdictions in October 2021, and original plan intended both Pillars to be implemented in 2023 – though this was always considered ambitious. OCED Secretary-General Mathias Cormann said, “We will keep working as quickly as possible to get this work finalised, but we will also take as much time as necessary to get the rules right. These rules will shape our international tax arrangements for decades to come.”

After the public consultation, the OECD aims to finalise a new Multilateral Convention by mid-2023, for entry into force in 2024. This extended timeline is “designed to allow greater engagement with citizens, business and parliamentary bodies which will ultimately have to ratify the agreement.”

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